03.02.202618:37 Forex Analyse & Reviews: Level and Target Adjustments for the U.S. Session – February 3rd

The euro and the pound were traded very successfully today using the Mean Reversion strategy. I did not execute any trades using Momentum.

The data on France's Consumer Price Index and the change in the number of unemployed in Spain maintained market balance, as did the absence of any U.K. economic statistics. Traders appear to have largely priced in these indicators, focusing instead on broader factors and U.S. data.

In France, the CPI came in slightly below economists' forecasts, indicating easing price pressure, while in Spain the number of unemployed increased again, which may push authorities toward more stimulative economic support measures. Overall, market reaction to this data was muted.

Next, an important indicator on job openings and labor turnover from the U.S. Bureau of Labor Statistics is expected, which should shed light on the condition of the U.S. labor market. Given that U.S. unemployment data scheduled for this Friday may not be released due to the partial shutdown of the U.S. economy, this report takes on added importance. Analysts always closely monitor these figures, as they provide insight into labor demand strength and potential wage growth, which in turn affects inflation expectations. At the same time, the RCM/TIPP Economic Optimism Index will provide valuable information on consumer and business sentiment regarding the current and future economic situation.

Later in the day, FOMC member Thomas Barkin and FOMC member Michelle Bowman are scheduled to speak. Their remarks will be carefully analyzed by investors and economists for clues about the future direction of monetary policy. Markets will be highly sensitive to any signals indicating the Federal Reserve's readiness to adjust its stance on inflation and interest rates. Any divergence in views among FOMC members could also trigger market volatility.

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 using the Mean Reversion strategy.

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

EUR/USD

• Buying on a breakout above 1.1827 may lead to euro gains toward 1.1868 and 1.1908.
• Selling on a breakout below 1.1782 may lead to a decline toward 1.1741 and 1.1705.

GBP/USD

• Buying on a breakout above 1.3701 may lead to pound growth toward 1.3753 and 1.3784.
• Selling on a breakout below 1.3660 may lead to a decline toward 1.3627 and 1.3593.

USD/JPY

• Buying on a breakout above 155.99 may lead to dollar growth toward 156.30 and 156.65.
• Selling on a breakout below 155.67 may lead to dollar selling toward 155.32 and 154.95.

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

EUR/USD

• I will look for sell opportunities after a failed breakout above 1.1827, followed by a return below this level.
• I will look for buy opportunities after a failed breakout below 1.1790, followed by a return to this level.

GBP/USD

• I will look for sell opportunities after a failed breakout above 1.3697, followed by a return below this level.
• I will look for buy opportunities after a failed breakout below 1.3662, followed by a return to this level.

AUD/USD

• I will look for sell opportunities after a failed breakout above 0.7035, followed by a return below this level.
• I will look for buy opportunities after a failed breakout below 0.6989, followed by a return to this level.

USD/CAD

• I will look for sell opportunities after a failed breakout above 1.3691, followed by a return below this level.
• I will look for buy opportunities after a failed breakout below 1.3659, followed by a return to this level.