11.05.202613:06 Analisis Forex & Kajian: Level and Target Adjustments for the U.S. Session – May 11th

Today, the euro and the British pound were traded using the Mean Reversion strategy, though no significant reversals ultimately developed. I did not execute any trades using the Momentum strategy.

The lack of major news kept the market balanced, giving bulls a slight advantage during the first half of the day. However, the future direction of risk assets will depend more on developments in the Middle East than on U.S. fundamental data.

In the second half of the day, only the U.S. existing home sales data is expected. This indicator is considered one of the key measures of the health of the housing market and consumer confidence in the country. Economists are closely monitoring the dynamics of these figures and, following March's decline, are forecasting a slight increase. If the report shows a decline or stagnation in sales volumes compared to previous periods, pressure on the dollar will most likely return. Any deviation from expectations will be highly significant for traders and the real estate market as a whole.

However, as noted above, the future direction of the currency market will largely depend on the situation in the Middle East. Geopolitical tensions in the region remain a key source of uncertainty with a significant impact on global markets. Any further escalation of the conflict could trigger a sharp rise in energy prices, disrupt supply chains, and lead to large-scale capital outflows from risk assets into safe-haven assets.

In the event of strong economic data, I will rely on the Momentum strategy. If the market shows little reaction to the data, I will continue using the Mean Reversion strategy.

Momentum Strategy (Breakout Trading) for the Second Half of the Day

For EUR/USD

• Buying on a breakout above 1.1780 could lead to euro growth toward 1.1804 and 1.1825;
• Selling on a breakout below 1.1760 could lead to a decline toward 1.1726 and 1.1701;

For GBP/USD

• Buying on a breakout above 1.3610 could lead to pound growth toward 1.3655 and 1.3700;
• Selling on a breakout below 1.3580 could lead to a decline toward 1.3550 and 1.3514;

For USD/JPY

• Buying on a breakout above 157.20 could lead to dollar growth toward 157.45 and 157.85;
• Selling on a breakout below 156.90 could lead to dollar selling toward 156.70 and 156.45;

Mean Reversion Strategy for the Second Half of the Day

For EUR/USD

• I will look for selling opportunities after a failed breakout above 1.1790 followed by a return below that level;
• I will look for buying opportunities after a failed breakout below 1.1758 followed by a return above that level;

For GBP/USD

• I will look for selling opportunities after a failed breakout above 1.3620 followed by a return below that level;
• I will look for buying opportunities after a failed breakout below 1.3585 followed by a return above that level;

For AUD/USD

• I will look for selling opportunities after a failed breakout above 0.7254 followed by a return below that level;
• I will look for buying opportunities after a failed breakout below 0.7230 followed by a return above that level;

For USD/CAD

• I will look for selling opportunities after a failed breakout above 1.3680 followed by a return below that level
• I will look for purchases after an unsuccessful exit beyond 1.3655 on a return to this level.