03.07.202612:18 Forex Analysis & Reviews: Level and Target Adjustments for the U.S. Session – July 3

Today, euro trading was executed using a Mean Reversion strategy. I traded yen using the Momentum strategy.

Today is Independence Day in the United States, so U.S. stock exchanges and a significant number of financial markets are closed. The absence of a key market participant traditionally leads to a noticeable decline in trading activity: liquidity in the forex market decreases, and volatility amplitude also contracts. Against this backdrop, the second half of the day is likely to remain subdued, and no strong dollar-driven movements or meaningful impulses should be expected. For the euro, this means that EUR/USD is likely to remain in a narrow range: without U.S. liquidity flow, the single currency has no strong catalyst to move. A similar situation applies to the British pound — GBP/USD is likely to trade sideways, as in the absence of U.S. market participation, price action is driven only by local U.K. news flow, which is insufficient to establish a sustained trend today.

In the case of strong data releases, I will rely on 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:

EUR/USD

• Buying on a breakout of 1.1459 may lead to growth toward 1.1486 and 1.1527.
• Selling on a breakout of 1.1422 may lead to a decline toward 1.1398 and 1.1365.

GBP/USD

• Buying on a breakout of 1.3355 may lead to growth toward 1.3390 and 1.3418.
• Selling on a breakout of 1.3335 may lead to a decline toward 1.3298 and 1.3267.

USD/JPY

• Buying on a breakout of 161.33 may lead to growth toward 161.56 and 161.83.
• Selling on a breakout of 161.00 may lead to a decline toward 160.80 and 160.50.

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

EUR/USD

• I will look for sell positions after a failed breakout above 1.1463, on a move back below this level.
• I will look for buy positions after a failed breakout below 1.1430, on a return above this level.

GBP/USD

• I will look for sell positions after a failed breakout above 1.3383, on a move back below this level.
• I will look for buy positions after a failed breakout below 1.3336, on a return above this level.

AUD/USD

• I will look for sell positions after a failed breakout above 0.6959, on a move back below this level.
• I will look for buy positions after a failed breakout below 0.6926, on a return above this level.

USD/CAD

• I will look for sell positions after a failed breakout above 1.4192, on a move back below this level.
• I will look for buy positions after a failed breakout below 1.4169, on a return above this level.