16.04.202612:38 Forex Analysis & Reviews: Level and Target Adjustments for the U.S. Session – April 16th

Today, only the euro was traded using the Mean Reversion strategy, but no strong reversals occurred. Using the Momentum strategy, I traded the pound and the Australian dollar.

Despite the fact that the Eurozone's Consumer Price Index rose to 2.6% year-over-year in March, the euro declined against the US dollar in the absence of positive news from the Middle East. This came as something of a surprise to many market participants, who had expected more confident performance from the European currency on the back of the inflation data.

The British pound also surprisingly ignored strong UK GDP data, indicating a complete lack of enthusiasm among buyers of risk assets, who were apparently expecting more positive progress in resolving the US-Iran conflict.

Ahead, we have a packed block of US macroeconomic data, which will provide a detailed overview of the state of the American economy. The data release sequence will begin with initial jobless claims, a weekly indicator that is one of the most timely measures of labor market conditions. A decline in claims typically signals a strengthening labor market and falling unemployment, while an increase may indicate the opposite.

Next, attention will turn to the Philadelphia Fed Manufacturing Index. This index reflects business activity in the manufacturing sector of one of the key industrial regions in the US and serves as an important barometer of manufacturing conditions. At the same time, data on US industrial production will be released, providing insight into the dynamics of output in the manufacturing sector—one of the key indicators of the overall health of the economy.

In addition to the data, one of the key events will be a speech by FOMC member John Williams. Given his significant role in shaping Federal Reserve monetary policy, his comments on the current economic situation, inflation expectations, and the outlook for interest rates will be closely analyzed.

If the data is strong, I will rely on the Momentum strategy. If the market does not react to the data, I will continue using the Mean Reversion strategy.

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

For EUR/USD:

• Buying on a breakout above 1.1790 may lead to a rise toward 1.1825 and 1.1850;
• Selling on a breakout below 1.1750 may lead to a decline toward 1.1735 and 1.1680.

For GBP/USD:

• Buying on a breakout above 1.3550 may lead to a rise toward 1.3585 and 1.3615;
• Selling on a breakout below 1.3515 may lead to a decline toward 1.3480 and 1.3450.

For USD/JPY:

• Buying on a breakout above 159.13 may lead to a rise toward 159.40 and 159.84;
• Selling on a breakout below 158.85 may lead to a decline toward 158.57 and 158.25.

Mean Reversion Strategy (Pullback) for the Second Half of the Day

For EUR/USD:

• Look for selling opportunities after a failed breakout above 1.1802 and a return below this level;
• Look for buying opportunities after a failed breakout below 1.1765 and a return to this level.

For GBP/USD:

• Look for selling opportunities after a failed breakout above 1.3565 and a return below this level;
• Look for buying opportunities after a failed breakout below 1.3519 and a return to this level.

For AUD/USD:

• Look for selling opportunities after a failed breakout above 0.7187 and a return below this level;
• Look for buying opportunities after a failed breakout below 0.7157 and a return to this level.

For USD/CAD:

• Look for selling opportunities after a failed breakout above 1.3744 and a return below this level;
• Look for buying opportunities after a failed breakout below 1.3715 and a return to this level.