23.06.202613:18 Analisis Forex & Kajian: Level and Target Adjustments for the U.S. Session – June 23rd

The euro, British pound, Australian dollar, and Canadian dollar were traded today using a Mean Reversion strategy. I did not trade anything using the Momentum strategy.

As the report showed, business activity in the Eurozone in June contracted at a slower pace than in previous months, marking the first cautiously encouraging signal in several months. The Composite PMI rose to 49.5 versus 48.5 in May, noticeably above the forecast of 49.1. In the United Kingdom, the data came in worse than expected, which negatively affected the British pound. The Composite PMI in June declined to 49.4 from 49.7 in May and was significantly below the forecast of 50.6.

Despite positive trends, it should be noted that PMI levels across many sectors remain below 50 points, which still indicates contraction in business activity.

In the second half of the day, attention will shift to similar data from the United States. Special focus will be on PMI business activity indices in both the manufacturing and services sectors. These indices are known to be sensitive barometers reflecting business sentiment and expectations regarding future output, new orders, employment, and prices. Readings above 50 points traditionally signal expansion, while values below this threshold indicate contraction. It is expected that both manufacturing PMI and services PMI in the United States will show strong dynamics, which may allow the U.S. dollar to continue its upward movement.

Additional insight into the manufacturing sector will be provided by the Richmond Fed Manufacturing Index. Although this regional index has a narrower scope, it is still considered an important indicator reflecting business activity in the 9th Federal Reserve District. Its data may provide insight into local trends, which in turn can serve as a precursor to broader national developments.

In 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:

• Buying on a breakout above 1.1422 may lead to growth toward 1.1451 and 1.1480.
• Selling on a breakout below 1.1385 may lead to a decline toward 1.1347 and 1.1314.

For GBP/USD:

• Buying on a breakout above 1.3230 may lead to growth toward 1.3270 and 1.3325.
• Selling on a breakout below 1.3205 may lead to a decline toward 1.3180 and 1.3162.

For USD/JPY:

• Buying on a breakout above 161.53 may lead to growth toward 161.83 and 162.04.
• Selling on a breakout below 161.33 may lead to a decline toward 161.10 and 160.90.

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

For EUR/USD:

• I will look for sell opportunities after a false breakout above 1.1419, with a return below this level.
• I will look for buy opportunities after a false breakout below 1.1388, with a return above this level.

For GBP/USD:

• I will look for sell opportunities after a false breakout above 1.3226, with a return below this level.
• I will look for buy opportunities after a false breakout below 1.3198, with a return above this level.

For AUD/USD:

• I will look for sell opportunities after a false breakout above 0.6972, with a return below this level.
• I will look for buy opportunities after a false breakout below 0.6939, with a return above this level.

For USD/CAD:

• I will look for sell opportunities after a false breakout above 1.4189, with a return below this level.
• I will look for buy opportunities after a false breakout below 1.4167, with a return above this level.