15.12.202513:08 Forex Analyse & Reviews: Level and Target Adjustments for the U.S. Session – December 15th

Due to very low volatility, suitable entry points using the Mean Reversion strategy never materialized. Using the Momentum strategy, I traded only the Japanese yen.

Eurozone industrial production data showed growth of 0.8%, while economists had expected an increase of just 0.1%. But who needs October data when it is already mid-December? As a result, the euro did not react to them at all. However, clear certainty regarding the future policy of the European Central Bank gives the euro an advantage against the U.S. dollar.

Later today, U.S. figures for the Empire Manufacturing Index and the NAHB Housing Market Index are expected. A speech by FOMC member John Williams will also take place. The release of the Empire Manufacturing Index will be an important indicator of the state of the U.S. manufacturing sector. A reading above expectations would indicate an expansion in manufacturing activity, which generally has a positive effect on the overall economic climate and could support the U.S. dollar. The NAHB Housing Market Index will be no less important, as it reflects builders' sentiment and their assessment of current conditions in the housing market. This indicator is a leading measure of activity in the construction sector. Positive NAHB data would signal a strong housing market, which could stimulate economic growth and boost consumer confidence.

Finally, the speech by FOMC member John Williams will attract particular attention from investors, as his comments may provide insight into his views on the future path of interest rates. Any signs of a more hawkish tone could have a positive impact on the dollar, while hints of continued dovish policy could lead to its weakening.

In the case of strong data, I will rely on implementing the Momentum strategy. If there is no market reaction 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 1.1748 may lead to a rise toward 1.1777 and 1.1801;
• Selling on a breakout below 1.1720 may lead to a decline toward 1.1670 and 1.1650.

For GBP/USD

• Buying on a breakout above 1.3390 may lead to a rise toward 1.3434 and 1.3470;
• Selling on a breakout below 1.3355 may lead to a decline toward 1.3320 and 1.3300.

For USD/JPY

• Buying on a breakout above 155.32 may lead to a rise toward 155.67 and 156.12;
• Selling on a breakout below 154.95 may lead to selling pressure toward 154.67 and 154.35.

Mean Reversion strategy (pullback) for the second half of the day:

For EUR/USD

• I will look for selling opportunities after a failed move above 1.1752 and a return below this level;
• I will look for buying opportunities after a failed move below 1.1724 and a return back to this level.

For GBP/USD

• I will look for selling opportunities after a failed move above 1.3395 and a return below this level;
• I will look for buying opportunities after a failed move below 1.3361 and a return back to this level.

For AUD/USD

• I will look for selling opportunities after a failed move above 0.6660 and a return below this level;
• I will look for buying opportunities after a failed move below 0.6640 and a return back to this level.

For USD/CAD

• I will look for selling opportunities after a failed move above 1.3775 and a return below this level;
• I will look for buying opportunities after a failed move below 1.3753 and a return back to this level.