18.06.202613:05 Analisis Forex & Kajian: Level and Target Adjustments for the U.S. Session – June 18th

The euro, pound, and Canadian dollar were traded today using the Momentum strategy. I did not take any trades using Mean Reversion.

It is clear that buyers of risk assets, including the euro and the pound, remain under pressure from yesterday's Federal Reserve decision in the United States. The memorandum of understanding signed by Trump with Iran was only a temporary relief factor.

Traders, fearing tighter monetary policy in the U.S., prefer to hedge their risks by investing in what they consider safer assets, such as the U.S. dollar. In this situation, further movement in risk assets will largely depend on the Fed's rhetoric and incoming U.S. economic data.

Upcoming data includes weekly Initial Jobless Claims and the Philadelphia Fed Manufacturing Index. These economic indicators are important measures of the health of the U.S. economy. Initial Jobless Claims reflect the current situation in the labor market, while the Philadelphia Fed Manufacturing Index reflects the state of industrial production in one of the country's key industrial regions. Positive results would support the view of sustained U.S. economic growth and, as a result, strengthen expectations of further Fed monetary tightening.

In turn, further strengthening of the dollar may put pressure on other currencies. It is important to note that the market has already partially priced in expectations of strong U.S. data. Therefore, if the figures come in only slightly below expectations, the market reaction may be limited.

In the case of strong data, I will rely on 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:

• Buy breakout above 1.1489 may lead to growth toward 1.1527 and 1.1557;
• Sell breakout below 1.1448 may lead to a decline toward 1.1414 and 1.1384;

For GBP/USD:

• Buy breakout above 1.3256 may lead to growth toward 1.3289 and 1.3323;
• Sell breakout below 1.3224 may lead to a decline toward 1.3193 and 1.3162;

For USD/JPY:

• Buy breakout above 160.91 may lead to growth toward 161.10 and 161.33;
• Sell breakout below 160.67 may lead to a decline toward 160.43 and 160.24;

Mean Reversion Strategy (Reversion to Mean) for the Second Half of the Day:

For EUR/USD:

• I will look for short positions after a failed breakout above 1.1512 followed by a move back below this level;
• I will look for long positions after a failed breakdown below 1.1442 followed by a move back above this level;

For GBP/USD:

• I will look for short positions after a failed breakout above 1.3277 followed by a move back below this level;
• I will look for long positions after a failed breakdown below 1.3195 followed by a move back above this level;

For AUD/USD:

• I will look for short positions after a failed breakout above 0.7028 followed by a move back below this level;
• I will look for long positions after a failed breakdown below 0.7000 followed by a move back above this level;

For USD/CAD:

• I will look for short positions after a failed breakout above 1.4136 followed by a move back below this level;
• I will look for long positions after a failed breakdown below 1.4098 followed by a move back above this level;