25.05.202612:58 Analisis Forex & Kajian: Level and Target Adjustments for the U.S. Session – May 25th

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

Given the lack of important macroeconomic data from the eurozone and the United Kingdom, the euro and the British pound did not show significant volatility, although they maintained their potential for further gains against the U.S. dollar. Traders paused, awaiting more substantial news catalysts before making decisions.

The main risks for the euro and the pound remain linked to the tense geopolitical situation and elevated inflation. In the absence of progress toward a peace agreement, the chances of further growth in risk assets will decline significantly.

Today's statements from Iran's Foreign Ministry pointed to progress toward a certain framework for an agreement, but uncertainty remains regarding the timing of a final deal. This cautious tone, combined with the lack of new and meaningful market catalysts, continues to support trading within a narrow sideways range. The Middle East situation will remain a key driver of current market dynamics and the primary focus for investors. The absence of U.S. macroeconomic data during the second half of the trading day only increases market attention toward developments in the region.

In the event of strong economic data, I will rely on the Momentum strategy. If the market shows no meaningful reaction to the data, I will continue using the Mean Reversion strategy.

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

EUR/USD

• A breakout above 1.1659 may lead to euro growth toward 1.1678 and 1.1698;
• A breakout below 1.1635 may lead to a decline toward 1.1609 and 1.1585;

GBP/USD

• A breakout above 1.3505 may lead to pound growth toward 1.3529 and 1.3557;
• A breakout below 1.3470 may lead to a decline toward 1.3440 and 1.3390;

USD/JPY

• A breakout above 159.15 may lead to dollar growth toward 159.40 and 159.65;
• A breakout below 158.80 may trigger dollar selling toward 158.55 and 158.25;

Mean Reversion Strategy for the Second Half of the Day

EUR/USD

• I will look for selling opportunities after a false breakout above 1.1653 followed by a return below this level;
• I will look for buying opportunities after a false breakout below 1.1629 followed by a return above this level;

GBP/USD

• I will look for selling opportunities after a false breakout above 1.3505 followed by a return below this level;
• I will look for buying opportunities after a false breakout below 1.3467 followed by a return above this level;

AUD/USD

• I will look for selling opportunities after a false breakout above 0.7180 followed by a return below this level;
• I will look for buying opportunities after a false breakout below 0.7156 followed by a return above this level;

USD/CAD

• I will look for selling opportunities after a false breakout above 1.3823 followed by a return below this level;
• I will look for buying opportunities after a false breakout below 1.3803 followed by a return above this level;