Level and Target Adjustments for the U.S. Session – September 16th

The euro and the pound continued their active rise today, making the Momentum strategy work very well. I did not trade using the Mean Reversion strategy.

A sharp increase in euro area business sentiment led to another strengthening of the euro against the U.S. dollar, followed by gains in the British pound. Investors welcomed the data, which indicated a recovery in industrial production and the services sector, easing fears of a possible recession in the region. Confidence in the European economy is also supported by other factors. In particular, inflation is slowing, albeit at a slower pace than previously expected. The European Central Bank continues to maintain a loose monetary policy, supporting the euro's attractiveness for investors in the long term.

In the second half of the day, the dollar may come under more significant pressure, as weak U.S. data is expected. Falling retail sales typically signal weakening consumer demand, which in turn negatively affects company profitability and overall economic outlook. Declines in industrial and manufacturing output indicate shrinking demand for goods and services, which could lead to reduced investment and job losses. In this context, the Federal Reserve will face the need to reassess its monetary policy as early as tomorrow. If the data confirms an economic slowdown, the likelihood of further rate cuts this year after tomorrow's meeting will increase significantly.

In the case of strong data, I will rely on implementing the Momentum strategy. If the market does not react to the releases, 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 1.1828 may push the euro toward 1.1866 and 1.1903.
• Selling on a breakout below 1.1785 may push the euro down to 1.1746 and 1.1703.

For GBP/USD

• Buying on a breakout above 1.3643 may push the pound toward 1.3677 and 1.3707.
• Selling on a breakout below 1.3614 may push the pound down to 1.3584 and 1.3555.

For USD/JPY

• Buying on a breakout above 147.12 may push the dollar toward 147.40 and 147.72.
• Selling on a breakout below 146.80 may push the dollar down to 146.40 and 146.10.

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

For EUR/USD

• I will look for selling opportunities after a failed breakout above 1.1827 with a return below this level.
• I will look for buying opportunities after a failed breakout below 1.1785 with a return above this level.

For GBP/USD

• I will look for selling opportunities after a failed breakout above 1.3651 with a return below this level.
• I will look for buying opportunities after a failed breakout below 1.3606 with a return above this level.

For AUD/USD

• I will look for selling opportunities after a failed breakout above 0.6679 with a return below this level.
• I will look for buying opportunities after a failed breakout below 0.6659 with a return above this level.

For USD/CAD

• I will look for selling opportunities after a failed breakout above 1.3777 with a return below this level.
• I will look for buying opportunities after a failed breakout below 1.3757 with a return above this level.