The dollar has weakened, while the euro, pound, and other risk assets have recovered amid new rumors of a peace agreement between the U.S. and Iran.

Risk assets have risen, and the dollar has weakened following reports that the U.S. and Iran reached a preliminary agreement to extend the ceasefire for 60 days. This news, leaked to the media, prompted a swift reaction from financial markets, which typically interpret a decrease in geopolitical tension as a signal to weaken safe-haven assets. The strengthening of the euro, pound, and other risk assets is a direct result of waning uncertainty in the Middle East. In addition to the general decline in demand for safe-haven assets, one cannot ignore the negative impact of fundamental data on the U.S. dollar's position. Recent GDP and inflation data did not sit well with dollar bulls.

Looking ahead, a significant amount of economic data is set to be released from Eurozone countries, which could impact the euro. Important figures include Germany's unemployment rate, the consumer price indices for Germany and Italy, and France's GDP. Starting with Germany, the locomotive of the European economy, the release of the unemployment data will be closely monitored. A decrease in the figure, even slight, could serve as a positive signal for the market, indicating resilience in domestic demand and potential for growth. Equally important is the consumer price index for Germany. Inflationary pressure is a key factor for the European Central Bank when making decisions on monetary policy. If inflation remains above the ECB's target levels, it may signal further monetary policy tightening, which in turn would support the euro. Similar reports are expected from Italy.

Completing this block of data is the Gross Domestic Product report from France. Data about economic growth serves as an indicator of the overall economic health of the second-largest member of the Eurozone. Sustained growth in France's GDP that exceeds expectations would provide a strong case for strengthening the euro.

Regarding the pound, despite the absence of fresh data from the UK, market attention is focused on the forthcoming speech by Bank of England Governor Andrew Bailey. His public statements often serve as a barometer of the pound's future movement, and today will be no exception. The central bank's position on future monetary policy will significantly influence the currency market.

If the data aligns with economists' expectations, it is advisable to act based on the Mean Reversion strategy. If the data turns out to be significantly above or below economists' expectations, the Momentum strategy will be more suitable.

Momentum Strategy (Breakout):

For the EUR/USD Pair

• Buy on a breakout of 1.1660 may lead to a rise in the euro to the levels of 1.1678 and 1.1698;
• Sell on a breakout of 1.1628 may lead to a drop in the euro to the levels of 1.1606 and 1.1579;

For the GBP/USD Pair

• Buy on a breakout of 1.3453 may lead to a rise in the pound to the levels of 1.3493 and 1.3529;
• Sell on a breakout of 1.3420 may lead to a drop in the pound to the levels of 1.3370 and 1.3337;

For the USD/JPY Pair

• Buy on a breakout of 159.39 may lead to a rise in the dollar to the levels of 159.60 and 159.83;
• Sell on a breakout of 159.13 may lead to a decline in the dollar to the levels of 158.83 and 158.57;

Mean Reversion Strategy (Return):

For the EUR/USD Pair

• Short positions will be sought after an unsuccessful breakout above 1.1666 on a return below this level;
• Long positions will be sought after an unsuccessful breakout below 1.1627 on a return to this level;

For the GBP/USD Pair

• Shorts will be sought after an unsuccessful breakout above 1.3453 on a return below this level;
• Longs will be sought after an unsuccessful breakout below 1.3424 on a return to this level;

For the AUD/USD Pair

• Shorts will be sought after an unsuccessful breakout above 0.7180 on a return below this level;
• Longs will be sought after an unsuccessful breakout below 0.7152 on a return to this level;

For the USD/CAD Pair

• Shorts will be sought after an unsuccessful breakout above 1.3798 on a return below this level;
• Longs will be sought after an unsuccessful breakout below 1.3773 on a return to this level;