The dollar continued to lose ground against risk assets actively. By the end of yesterday, the dollar fell to its lowest level since the beginning of 2022. This occurred after US President Donald Trump indicated that he was satisfied with the currency's decline. This statement provoked a strong reaction in the financial markets, as the traditionally strong dollar was considered one of the pillars of the American economy.

Many traders are now speculating about the long-term consequences of such a policy and how it will affect the global trading system. On the one hand, a weaker dollar could stimulate US exports, making American goods more competitive in the global market, which Trump has frequently discussed and actively pursued. On the other hand, this could lead to rising inflation, as imported goods will become more expensive for American consumers, creating additional headaches for the Federal Reserve, which Trump demands to actively lower interest rates.

Today, in the first half of the day, only the leading consumer climate index from Germany (by GfK) is expected, which is unlikely to significantly harm the euro even with poor results. However, considering that the US Fed meeting is today, we are unlikely to see any significant changes in the market or a change in direction.

As for the pound, given the lack of significant statistical data from the UK today, it is reasonable to expect further growth in GBP/USD in line with the trend. However, do keep in mind the Fed meeting, so until the breakout of the monthly high in the pair occurs, it is unlikely we will see any significant movement ahead of its results and Powell's speech.

If the data aligns with economists' expectations, it is better to act based on the Mean Reversion strategy. If the data turns out to be significantly higher or lower than expectations, the Momentum strategy is the way to go.

Momentum Strategy (Breakout):

For the EUR/USD Pair

Long positions on a breakout of the level 1.2010 could lead to euro growth toward 1.2055 and 1.2080;

Short positions on a breakout of the level 1.1973 could lead to a euro decline toward 1.1942 and 1.1911;

For the GBP/USD Pair

Longs on a breakout of the level 1.3820 could lead to pound growth toward 1.3854 and 1.3873;

Shorts on a breakout of the level 1.3785 could lead to a pound decline toward 1.3745 and 1.3715;

For the USD/JPY Pair

Longs on a breakout of the level 152.85 could lead to dollar growth toward 153.27 and 153.70;

Shorts on a breakout of the level 152.47 could lead to dollar sell-offs toward 152.10 and 151.73;

Mean Reversion Strategy (Retracement):

For the EUR/USD Pair

Shorts will be sought after a failed breakout above 1.2027 on a return below this level;

Longs will be sought after a failed breakout below 1.1966 on a return to this level;

For the GBP/USD Pair

Shorts will be sought after a failed breakout above 1.3830 on a return below this level;

Longs will be sought after a failed breakout below 1.3774 on a return to this level;

For the AUD/USD Pair

Shorts will be sought after a failed breakout above 0.7014 on a return below this level;

Longs will be sought after a failed breakout below 0.6973 on a return to this level;

For the USD/CAD Pair

Shorts will be sought after a failed breakout above 1.3617 on a return below this level;

Longs will be sought after a failed breakout below 1.3578 on a return to this level;