FX.co ★ Level and Target Adjustments for the U.S. Session – March 26th

The euro and the British pound were traded today using the Mean Reversion strategy. I did not trade anything using Momentum.

Data on lending and money supply in the eurozone, as expected, had no significant impact on the market. On the contrary, they merely confirmed current trends, leaving financial markets in a state of relative uncertainty. Lending activity remains moderate. Although demand for loans from businesses has slightly improved, the overall volume of new lending is not showing explosive growth. According to the latest report, the money supply has also declined.

In the second half of the day, traders will likely focus on U.S. initial jobless claims data and a speech by FOMC member Lisa D. Cook. These two events, although seemingly unrelated at first glance, are important for assessing the current economic situation and forecasting the future trajectory of U.S. Federal Reserve monetary policy.

Unemployment data is one of the most sensitive indicators of the U.S. labor market. A decline in initial jobless claims usually signals economic strengthening and job growth, which may prompt a more hawkish stance from the Fed. At the same time, special attention will be paid to the speech by FOMC member Lisa D. Cook. Statements by Fed officials often contain important hints about future monetary policy decisions, and considering the situation in the Middle East, Cook's tone will most likely be fairly hawkish, which should support the dollar.

If the data comes out strong, I will rely on the Momentum strategy. If there is no 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 1.1570 ? targets: 1.1590 and 1.1625
• Sell on a breakout below 1.1549 ? targets: 1.1519 and 1.1486

GBP/USD

• Buy on a breakout above 1.3366 ? targets: 1.3394 and 1.3424
• Sell on a breakout below 1.3337 ? targets: 1.3307 and 1.3273

USD/JPY

• Buy on a breakout above 159.53 ? targets: 159.74 and 159.94
• Sell on a breakout below 159.40 ? targets: 159.10 and 158.73

Mean Reversion strategy (reversal) for the second half of the day

EUR/USD

• Look for sells after a false breakout above 1.1575, on a return below this level
• Look for buys after a false breakout below 1.1548, on a return to this level

GBP/USD

• Look for sells after a false breakout above 1.3370, on a return below this level
• Look for buys after a false breakout below 1.3335, on a return to this level

USD/CAD

• Look for sells after a false breakout above 1.3841, on a return below this level
• Look for buys after a false breakout below 1.3817, on a return to this level

• AUD/USD

• Look for sells after a false breakout above 0.6955, on a return below this level
• Look for buys after a false breakout below 0.6927, on a return to this level