06.02.202613:33 Analisis Forex & Kajian: Level and Target Adjustments for the U.S. Session – February 6th

Another set of weak data on the decline in German industrial production put pressure on the euro, which does not fit into the generally positive picture following yesterday's sharp increase in industrial orders. Particularly worrying is the fact that the contraction in production volumes has been observed for more than one month. A slowdown in industrial activity in Germany will inevitably affect the performance of the entire European Union, given the close interconnection of member-state economies.

Later today, the University of Michigan Consumer Sentiment Index is expected. This indicator is an important barometer of Americans' overall attitude toward the current state of the economy and their personal financial prospects. Positive dynamics may signal confidence, which would support the dollar. Inflation expectations from this survey are also of great importance to the central bank. If expectations of rising prices increase, this could push the Federal Reserve toward more restrictive measures.

It is important to note that no U.S. labor market data are expected today, such as the Nonfarm Payrolls report or the unemployment rate. This means that the focus of attention will shift to the consumer segment of the economy.

In the case of strong statistics, I will rely on implementing the Momentum strategy. If there is no market reaction to the data, I will continue using the Mean Reversion strategy.

Momentum strategy (breakout) for the second half of the day:

For the EUR/USD pair

• Buying on a breakout above 1.1805 could lead to euro growth toward 1.1830 and 1.1868;
• Selling on a breakout below 1.1780 could lead to a decline in the euro toward 1.1740 and 1.1700.

For the GBP/USD pair

• Buying on a breakout above 1.3590 could lead to pound growth toward 1.3630 and 1.3660;
• Selling on a breakout below 1.3560 could lead to a decline in the pound toward 1.3540 and 1.3510.

For the USD/JPY pair

• Buying on a breakout above 157.10 could lead to dollar growth toward 157.50 and 157.99;
• Selling on a breakout below 156.90 could lead to dollar sell-offs toward 156.40 and 156.17.

Mean Reversion strategy (pullback) for the second half of the day:

For the EUR/USD pair

• I will look for sell opportunities after a failed move above 1.1805 and a return below this level;
• I will look for buy opportunities after a failed move below 1.1779 and a return to this level.

For the GBP/USD pair

• I will look for sell opportunities after a failed move above 1.3591 and a return below this level;
• I will look for buy opportunities after a failed move below 1.3552 and a return to this level.

For the AUD/USD pair

• I will look for sell opportunities after a failed move above 0.6989 and a return below this level;
• I will look for buy opportunities after a failed move below 0.6961 and a return to this level.

For the USD/CAD pair

• I will look for sell opportunities after a failed move above 1.3695 and a return below this level;
• I will look for buy opportunities after a failed move below 1.3673 and a return to this level.