02.09.202613:29 Analisis Forex & Kajian: Level and Target Adjustments for the U.S. Session – September 2

The pound and euro provided excellent trading opportunities today using the Mean Reversion strategy. I traded the Japanese yen using Momentum.

As expected, the lack of important eurozone economic data helped the euro withstand selling pressure. A similar situation occurred with the British pound. All of this suggests that when there is no domestic data available, traders prefer to adopt a wait-and-see approach. Nevertheless, the stability remains fragile, as a renewed demand for the dollar or a deterioration in the external backdrop could put risk assets under pressure.

The market is now awaiting the August ADP employment data from the US, the change in factory orders, and the release of the Federal Reserve's regional economic report, known as the Beige Book. The ADP report is considered an early indicator of labor market conditions and often sets the tone ahead of the official employment data. Factory orders reflect business investment activity, while the Beige Book summarizes assessments of economic conditions across regions and helps show how the Fed views the state of the economy. The extent to which the labor market report differs from forecasts will determine the dollar's subsequent direction.

This poses a direct risk to the euro, the pound, and other risk assets. Strong employment data will strengthen the dollar and put pressure on EUR/USD and GBP/USD, while a weak result will weaken the US currency and give both European pairs some relief. Given that the dollar is already supported by a hawkish stance following Jackson Hole, a strong report would further strengthen its position. Before the data are released, the pair is likely to trade cautiously, while the main volatility is expected around the release of the labor market figures.

If the data are strong, I will rely on the Momentum strategy. If the market does not react to the data, I will continue to use the Mean Reversion strategy.

Momentum Strategy (breakout) for the second half of the day:

For EUR/USD

• Buying on a breakout above 1.1583 could lead to a rise in the euro toward 1.1606 and 1.1623;
• Selling on a breakout below 1.1564 could lead to a decline in the euro toward 1.1550 and 1.1534;

For GBP/USD

• Buying on a breakout above 1.3494 could lead to a rise in the pound toward 1.3512 and 1.3531;
• Selling on a breakout below 1.3475 could lead to a decline in the pound toward 1.3435 and 1.3401;

For USD/JPY

• Buying on a breakout above 160.13 could lead to a rise in the dollar toward 160.43 and 160.67;
• Selling on a breakout below 159.60 could lead to a decline in the dollar toward 159.39 and 158.83;

Mean Reversion Strategy (return to the level) for the second half of the day:

For EUR/USD

• I will look for selling opportunities after a failed break above 1.1585, followed by a return below this level;
• I will look for buying opportunities after a failed break below 1.1560, followed by a return to this level;

For GBP/USD

• I will look for selling opportunities after a failed break above 1.3502, followed by a return below this level;
• I will look for buying opportunities after a failed break below 1.3466, followed by a return to this level;

For AUD/USD

• I will look for selling opportunities after a failed break above 0.7143, followed by a return below this level;
• I will look for buying opportunities after a failed break below 0.7114, followed by a return to this level;

For USD/CAD

• I will look for selling opportunities after a failed break above 1.3945, followed by a return below this level;
• I will look for buying opportunities after a failed break below 1.3922, followed by a return to this level;