13.05.202613:19 Analisis Forex & Kajian: Level and Target Adjustments for the U.S. Session – May 13th

Today, only the Canadian dollar was traded using the Mean Reversion strategy, but it never developed into a proper reversal movement. Through the Momentum strategy, I traded the British pound.

The euro continued to decline against the dollar following rather mediocre Eurozone statistics. GDP and employment change in the first quarter matched economists' forecasts, while industrial production increased by only 0.2% month-over-month versus the expected 0.4% growth. These figures point to stagnation in the European economy, which negatively affects the euro exchange rate. Many expect further weakening of the euro, especially if the economic situation in the Eurozone does not improve in the near future. The key factors to watch are inflation, consumer spending, and the geopolitical environment.

Next, the market awaits U.S. Producer Price Index (PPI) data for April, as well as the core indicator, which excludes food and energy prices. These figures are among the leading indicators of inflationary pressure in the economy and may significantly influence future Federal Reserve decisions on interest rates. The publication of the PPI will provide valuable insight into cost dynamics at various stages of the production cycle. A rise in the PPI may signal that producers could pass higher costs on to consumers, which in turn could accelerate consumer inflation.

Comments are also expected today from FOMC members Susan M. Collins and Neel Kashkari. Their speeches may shed light on the Fed's current views regarding the state of the economy, inflation prospects, and the future path of monetary policy — especially after having two April inflation reports available.

If the statistics are strong, I will rely on the Momentum strategy. If the market shows no 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 1.1715 may lead to euro growth toward 1.1751 and 1.1800;
• Selling on a breakout below 1.1700 may lead to euro decline toward 1.1675 and 1.1638;

For GBP/USD

• Buying on a breakout above 1.3530 may lead to pound growth toward 1.3560 and 1.3585;
• Selling on a breakout below 1.3502 may lead to pound decline toward 1.3480 and 1.3455;

For USD/JPY

• Buying on a breakout above 157.95 may lead to dollar growth toward 158.35 and 158.75;
• Selling on a breakout below 157.69 may lead to dollar sell-offs toward 157.40 and 157.05;

Mean Reversion Strategy (Reversal Trading) for the Second Half of the Day

For EUR/USD

• I will look for selling opportunities after a failed breakout above 1.1719 followed by a return below this level;
• I will look for buying opportunities after a failed breakout below 1.1685 followed by a return above this level;

For GBP/USD

• I will look for selling opportunities after a failed breakout above 1.3538 followed by a return below this level;
• I will look for buying opportunities after a failed breakout below 1.3493 followed by a return above this level;

For AUD/USD

• I will look for selling opportunities after a failed breakout above 0.7252 followed by a return below this level;
• I will look for buying opportunities after a failed breakout below 0.7229 followed by a return above this level;

For USD/CAD

• I will look for selling opportunities after a failed breakout above 1.3715 followed by a return below this level;
• I will look for buying opportunities after a failed breakout below 1.3687 followed by a return above this level.