30.07.202512:39 Forex Analysis & Reviews: Level and Target Adjustments for the U.S. Session – July 30th

The euro saw a slight increase in response to news that the eurozone's GDP grew by 0.1% in the second quarter of this year. The British pound also corrected ahead of an important economic event.

In anticipation of the upcoming ADP employment report and U.S. GDP data, market participants are acting cautiously and prefer to stay on the sidelines. The ADP report, as a leading indicator, provides an early insight into the labor market ahead of the official Department of Labor statistics. The previous report was very weak, so if the actual figures significantly exceed expectations, it could prompt the Federal Reserve to consider a more dovish stance. Meanwhile, GDP dynamics will help assess the current state of the U.S. economy. Steady GDP growth would support optimism, but at the same time, it could increase pressure on the Fed to contain inflation. Conversely, a slowdown in GDP growth would raise recession fears and may trigger a negative reaction in the stock market.

Also today, the U.S. FOMC is expected to announce its decision on the key interest rate. This event will undoubtedly be one of the main factors shaping financial market dynamics in the coming weeks. The impact of the FOMC's decision extends well beyond the U.S. economy. A change in the interest rate directly affects currency exchange rates. Moreover, the Fed's decision often sets the tone for other central banks' monetary policy, influencing global capital flows. Against a backdrop of high uncertainty regarding the future path of inflation and the labor market, the Fed is likely to leave its policy unchanged today, which would support the dollar against several risk assets. Otherwise, the dollar could weaken significantly.

In the case of strong economic data, I will rely on the Momentum strategy. If the market shows no reaction to the releases, I will continue to apply the Mean Reversion strategy.

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

EUR/USD:

• Buying on a breakout above 1.1570 may lead to an advance toward 1.1605 and 1.1640;
• Selling on a breakout below 1.1535 may trigger a decline toward 1.1500 and 1.1460.

GBP/USD:

• Buying on a breakout above 1.3380 may lead to a rise toward 1.3425 and 1.3450;
• Selling on a breakout below 1.3355 may drive a decline toward 1.3300 and 1.3266.

USD/JPY:

• Buying on a breakout above 148.16 may lead to an upward move toward 148.50 and 149.00;
• Selling on a breakout below 147.85 may result in a decline toward 147.50 and 147.20.

Mean Reversion Strategy (Reversal Trades) for the Second Half of the Day

EUR/USD:

• Look to sell after a failed breakout above 1.1575, once the price returns below this level;
• Look to buy after a failed breakout below 1.1538, once the price returns above this level.

GBP/USD:

• Look to sell after a failed breakout above 1.3384, once the price returns below this level;
• Look to buy after a failed breakout below 1.3334, once the price returns above this level.

AUD/USD:

• Look to sell after a failed breakout above 0.6520, once the price returns below this level;
• Look to buy after a failed breakout below 0.6494, once the price returns above this level.

USD/CAD:

• Look to sell after a failed breakout above 1.3792, once the price returns below this level;
• Look to buy after a failed breakout below 1.3759, once the price returns above this level.