19.06.202612:04 Forex Analysis & Reviews: Level and Target Adjustments for the U.S. Session – June 19th

The euro and the British pound were traded today using a Mean Reversion strategy. I did not take any trades based on the Momentum strategy.

In the second half of the day, a quiet period is expected in U.S. economic data releases, which creates an opportunity window for the euro and the British pound. Against the backdrop of current profit-taking, the euro may receive a favorable impulse for further recovery against the U.S. dollar, while buyers of the British pound may continue to benefit from strong retail sales data. According to the latest figures, retail sales in May increased by 1.2% month-on-month. This result significantly exceeded analysts' expectations of a 0.5% increase and marked a rebound after a 1.3% decline in April.

However, the temporary absence of significant macroeconomic releases from the United States reduces uncertainty and allows the market to focus on other factors influencing currency pair dynamics, including developments related to the potential signing of a memorandum between the United States and Iran. It was reported today that the Iranian negotiation delegation is postponing its trip to Switzerland due to ongoing Israeli strikes in southern Lebanon. The potential consequences of this situation remain uncertain, indicating that the Middle East issue is still unresolved.

Nevertheless, it is important to remember that currency markets are highly sensitive to unexpected news or statements from central bank officials. Therefore, despite current conditions that may support a recovery in risk assets, the possibility of renewed volatility and corrective reversals remains.

In the case of strong economic 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:

EUR/USD:

• Buy breakout above 1.1485 targeting 1.1527 and 1.1557
• Sell breakout below 1.1448 targeting 1.1414 and 1.1384

GBP/USD:

• Buy breakout above 1.3256 targeting 1.3289 and 1.3323
• Sell breakout below 1.3215 targeting 1.3193 and 1.3162

USD/JPY:

• Buy breakout above 161.33 targeting 161.56 and 161.83
• Sell breakout below 161.15 targeting 160.90 and 160.67

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

EUR/USD:

• Sell after a failed breakout above 1.1487, upon a return below this level
• Buy after a failed breakout below 1.1438, upon a return above this level

GBP/USD:

• Sell after a failed breakout above 1.3257, upon a return below this level
• Buy after a failed breakout below 1.3196, upon a return above this level

AUD/USD:

• Sell after a failed breakout above 0.7036, upon a return below this level
• Buy after a failed breakout below 0.7010, upon a return above this level

USD/CAD:

• Sell after a failed breakout above 1.4148, upon a return below this level
• Buy after a failed breakout below 1.4123, upon a return above this level