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The rise of the euro and the pound has paused. Yesterday's weak U.S. consumer confidence data failed to seriously pressure the dollar, resulting in only a modest strengthening of the euro and the British pound. However, during today's Asian trading session, pressure on these instruments resumed.
The consumer confidence index came in significantly below economists' expectations, indicating growing concern among U.S. consumers about the state of the economy. This triggered a wave of dollar selling as traders revised their expectations regarding the Federal Reserve's future policy. The weakening of the dollar, in turn, created a favorable environment for risk assets to strengthen.
But more important are today's upcoming events. The economic calendar is packed. In the first half of the day, we expect data on the change in Eurozone GDP for Q1, as well as Germany's CPI, unemployment rate, and retail sales figures.
The Eurozone GDP data will help assess the extent of the economy's recovery after winter and provide insight into its future trajectory. Analysts are closely watching these indicators, as they are key measures of the Eurozone's economic health and directly influence European Central Bank decisions.
German data will be equally important. The German CPI will indicate inflationary pressure in the Eurozone's largest economy. The unemployment rate will reflect labor market conditions, while retail sales data will provide insight into consumer activity.
Together, these factors will paint a picture of the region's economic landscape, influencing trader sentiment and the euro's direction. No important data is expected from the UK today.
If the data aligns with economists' expectations, acting based on the Mean Reversion strategy is better. The Momentum strategy is recommended if the data significantly exceeds or falls short of expectations.
Buy on a breakout above 1.1395 could lead to a rise toward 1.1435 and 1.1490
Sell on a breakout below 1.1360 could lead to a drop toward 1.1320 and 1.1267
Buy on a breakout above 1.3410 could lead to a rise toward 1.3465 and 1.3510
Sell on a breakout below 1.3375 could lead to a drop toward 1.3333 and 1.3282
Buy on a breakout above 142.80 could lead to a rise toward 143.30 and 143.71
Sell on a breakout below 142.30 could lead to a decline toward 141.82 and 141.34
Look to sell after a failed breakout above 1.1396, on a return below this level
Look to buy after a failed breakout below 1.1355, on a return above this level
Look to sell after a failed breakout above 1.3415, on a return below this level
Look to buy after a failed breakout below 1.3371, on a return above this level
Look to sell after a failed breakout above 0.6429, on a return below this level
Look to buy after a failed breakout below 0.6396, on a return above this level
Look to sell after a failed breakout above 1.3853, on a return below this level
Look to buy after a failed breakout below 1.3813, on a return above this level
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