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The U.S. dollar continued to lose ground actively, which comes as no surprise. The market is increasingly convinced that the Federal Reserve will be forced to act more dovishly, which undermines dollar buyers' confidence.
This morning, the eurozone and Germany will release ZEW business sentiment indices, the ZEW current conditions index for Germany, and eurozone industrial production figures. These reports will be important indicators of the region's economic health, helping assess business confidence and industrial sector dynamics.
The ZEW sentiment index, as a barometer of business expectations, will provide insight into the outlook for economic growth in the eurozone and Germany. An improvement would signal optimism among entrepreneurs and readiness to expand activity, which in turn could stimulate investment and job creation. The German current conditions index will complement this picture, showing how well the economy is performing at present. Any divergence between current conditions and expectations could point to potential risks or opportunities for policy adjustment. Industrial production data will reveal the actual state of the industrial sector, the engine of the economy.
In the U.K., the morning will bring a series of labor market reports: changes in jobless claims, the unemployment rate, and average earnings dynamics. Jobless claims serve as a leading indicator of shifts in employment. A sharp increase may warn of slowing growth or sector-specific difficulties, while a decrease would signal improving labor market conditions and stronger business activity. The unemployment rate offers a broader picture, reflecting the share of the labor force actively seeking but unable to find work. Only very strong figures are likely to lift the pound.
If the data match economists' expectations, the Mean Reversion strategy is preferable. If results are significantly above or below expectations, the Momentum strategy is more effective.
Buys on a breakout above 1.1785 could lead to growth toward 1.1830 and 1.1866.
Sells on a breakout below 1.1760 could push the euro down toward 1.1735 and 1.1703.
Buys on a breakout above 1.3625 could push the pound toward 1.3645 and 1.3677.
Sells on a breakout below 1.3610 could push it down toward 1.3580 and 1.3555.
Buys on a breakout above 147.16 could drive the dollar higher toward 147.55 and 147.84.
Sells on a breakout below 146.95 could trigger a decline toward 146.66 and 146.31.
Sells after a failed breakout above 1.1795 with a return below this level.
Buys after a failed breakout below 1.1758 with a return to this level.
Sells after a failed breakout above 1.3631 with a return below this level.
Buys after a failed breakout below 1.3593 with a return to this level.
Sells after a failed breakout above 0.6679 with a return below this level.
Buys after a failed breakout below 0.6660 with a return to this level.
Sells after a failed breakout above 1.3784 with a return below this level.
Buys after a failed breakout below 1.3761 with a return to this level.