13.02.202612:34 Analisis Forex & Kajian: Level and Target Adjustments for the U.S. Session – February 13th

Today, the euro, British pound, and Canadian dollar were traded using the Mean Reversion strategy. I did not execute any trades using the Momentum strategy.

The absence of important statistics affected market volatility, allowing the Mean Reversion strategy to perform quite well. In the second half of the day, we are expecting important U.S. inflation data. This release is of primary importance for shaping further market sentiment, especially regarding Federal Reserve monetary policy. Of particular interest is the Core Consumer Price Index, which excludes volatile components such as food and energy. This indicator is often regarded by the Fed as a more accurate reflection of underlying inflation trends. If the figure declines, pressure on the dollar will increase significantly. Such a development would signal a potential slowdown in inflation, which in turn could affect expectations regarding future interest rate cuts.

A rise in inflation, as reflected in the data, will likely strengthen assumptions that the Fed may adopt a more prolonged wait-and-see stance. On the one hand, this is positive for the dollar, but on the other, negative for 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 EUR/USD

• Buying on a breakout above 1.1878 may lead to growth toward 1.1905 and 1.1925;
• Selling on a breakout below 1.1850 may lead to a decline toward 1.1830 and 1.1805.

For GBP/USD

• Buying on a breakout above 1.3630 may lead to growth toward 1.3665 and 1.3707;
• Selling on a breakout below 1.3615 may lead to a decline toward 1.3580 and 1.3545.

For USD/JPY

• Buying on a breakout above 153.70 may lead to growth toward 154.15 and 154.40;
• Selling on a breakout below 153.27 may lead to a decline toward 152.85 and 152.47.

Mean Reversion Strategy (Pullback) for the Second Half of the Day

For EUR/USD

• I will look for selling opportunities after a false breakout above 1.1880, on a return below this level;
• I will look for buying opportunities after a false breakout below 1.1846, on a return to this level.

For GBP/USD

• I will look for selling opportunities after a false breakout above 1.3655, on a return below this level;
• I will look for buying opportunities after a false breakout below 1.3595, on a return to this level.

For AUD/USD

• I will look for selling opportunities after a false breakout above 0.7104, on a return below this level;
• I will look for buying opportunities after a false breakout below 0.7039, on a return to this level.

For USD/CAD

• I will look for selling opportunities after a false breakout above 1.3625, on a return below this level;
• I will look for buying opportunities after a false breakout below 1.3585, on a return to this level.