14.07.202612:25 Analisis Forex & Kajian: Level and Target Adjustments for the U.S. Session – July 14th

The Mean Reversion strategy did not generate any valid signals for the euro or the British pound today. The Canadian dollar was traded using the Momentum strategy.

With no eurozone economic data released, the euro gained only slightly against the dollar today, while market conditions remained rather tense. Since the single currency lacked its own drivers, its direction was determined by external factors, which continued to be dominated by geopolitical developments. The situation surrounding the Strait of Hormuz and the exchange of strikes between the United States and Iran continued to weigh on risk assets. As one of these assets, the euro remained under pressure, which limited its recovery to modest levels. Persistent tensions in the Middle East are likely to sustain demand for the safe-haven dollar, limiting the euro's recovery potential.

During the second half of the day, the balance of power in the market may change significantly, as a series of important events from the United States is scheduled. The main focus will be on the June Consumer Price Index (CPI) and the core CPI excluding food and energy, as well as Federal Reserve Chair Kevin Warsh's semiannual testimony before Congress. The Consumer Price Index reflects the pace of inflation and directly influences interest rate expectations, while the core indicator is considered a more reliable benchmark because it excludes volatile components. The stronger the figures are, the stronger the argument in favor of a more restrictive Fed policy and the greater the support for the U.S. dollar.

For the euro and the pound, these releases present a direct risk. Strong inflation combined with a hawkish tone from Warsh could strengthen the dollar and pressure EUR/USD and GBP/USD lower, while slowing price growth and cautious remarks from the Fed Chair would give both European currencies an opportunity to recover. Before the data is released, the pairs are likely to trade cautiously, but a sharp increase in volatility is possible during the second half of the day.

If the economic data comes in strong, the Momentum strategy will be prioritized. If the market does not react to the data, the Mean Reversion strategy will continue to be used.

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

EUR/USD

• Buying a breakout above 1.1402 could lead to a rise toward 1.1422 and 1.1442.
• Selling a breakout below 1.1380 could lead to a decline toward 1.1360 and 1.1345.

GBP/USD

• Buying a breakout above 1.3400 could lead to a rise toward 1.3430 and 1.3460.
• Selling a breakout below 1.3360 could lead to a decline toward 1.3340 and 1.3323.

USD/JPY

• Buying a breakout above 162.22 could lead to a rise toward 162.44 and 162.64.
• Selling a breakout below 161.92 could trigger a decline in the dollar toward 161.62 and 161.33.

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

EUR/USD

• Selling opportunities will be considered after a failed breakout above 1.1411 followed by a return below this level.
• Buying opportunities will be considered after a failed breakout below 1.1380 followed by a return to this level.

GBP/USD

• Selling opportunities will be considered after a failed breakout above 1.3393 followed by a return below this level.
• Buying opportunities will be considered after a failed breakout below 1.3357 followed by a return to this level.

AUD/USD

• Selling opportunities will be considered after a failed breakout above 0.6965 followed by a return below this level.
• Buying opportunities will be considered after a failed breakout below 0.6935 followed by a return to this level.

USD/CAD

• Selling opportunities will be considered after a failed breakout above 1.4102 followed by a return below this level.
• Buying opportunities will be considered after a failed breakout below 1.4069 followed by a return to this level.