14.08.202512:42 Forex Analysis & Reviews: Adjustment of Levels and Targets for the US Session – August 14th

Today, only the British pound was traded using the Mean Reversion strategy. With the Momentum approach, I traded the Japanese yen and the Australian dollar, but no major moves developed.

The euro declined following a weak Eurozone GDP report, while the British pound attempted to strengthen after a similarly strong report on the UK economy. The slowdown in Eurozone economic growth is raising concerns about the region's outlook. Traders are worried that the European Central Bank might revert to a more dovish stance on interest rate hikes given the deteriorating economic situation.

In the second half of the day, we await U.S. data on initial jobless claims, the Producer Price Index, and a speech by FOMC member Thomas Barkin. These events may add volatility to the currency markets and provide valuable guidance for assessing the state of the U.S. economy and the Federal Reserve's intentions. Weak jobless claims data, for example, could heighten concerns about a slowdown in U.S. economic growth and potentially lower expectations for keeping rates at their current level for longer. This could weaken the dollar and support the euro. Conversely, strong labor market data could strengthen the dollar, especially if accompanied by hawkish comments from Federal Reserve officials.

The Producer Price Index is an important indicator of inflationary pressure in the economy. An increase in PPI may indicate that inflation remains persistent and that the Fed may need to continue an aggressive rate hike policy. Thomas Barkin's speech will offer insight into the sentiment within the Federal Open Market Committee and provide an understanding of how the Fed views the current economic situation and what actions it plans to take going forward.

If the data is strong, I will rely on the Momentum strategy. If there is no significant market reaction, I will continue using the Mean Reversion strategy.

Momentum Strategy (breakout) for the second half of the day:

EUR/USD

• Buy on a breakout above 1.1698 – targets: 1.1730 and 1.1770
• Sell on a breakout below 1.1666 – targets: 1.1635 and 1.1601

GBP/USD

• Buy on a breakout above 1.3587 – targets: 1.3615 and 1.3643
• Sell on a breakout below 1.3555 – targets: 1.3518 and 1.3479

USD/JPY

• Buy on a breakout above 146.65 – targets: 147.00 and 147.34
• Sell on a breakout below 146.40 – targets: 146.10 and 145.80

Mean Reversion Strategy (reversal) for the second half of the day:

EUR/USD

• Look for sales after a failed breakout above 1.1702 followed by a return below this level
• Look for purchases after a failed breakout below 1.1659 followed by a return to this level

GBP/USD

• Look for sales after a failed breakout above 1.3599 followed by a return below this level
• Look for purchases after a failed breakout below 1.3559 followed by a return to this level

AUD/USD

• Look for sales after a failed breakout above 0.6550 followed by a return below this level
• Look for purchases after a failed breakout below 0.6520 followed by a return to this level

USD/CAD

• Look for sales after a failed breakout above 1.3789 followed by a return below this level
• Look for purchases after a failed breakout below 1.3760 followed by a return to this level