The euro and the pound continued their decline, which is more likely linked to profit-taking on long positions ahead of important data rather than a general strengthening of the US dollar.

In the absence of US data, the dollar managed to gain against the euro and the pound yesterday, but this growth, though moderate, has not yet significantly changed the market balance. Traders seem to have shifted their attention to the relative stability of the US economy, at least in the short term.

The euro, on the other hand, is under pressure due to ongoing concerns about economic growth in the region. However, the lack of major US data is only a temporary factor, and future economic indicators could alter the current dynamics of currency pairs.

Today, figures for the Eurozone ZEW Economic Sentiment Index and Germany's Current Situation Index are expected. These indicators, acting as a litmus test, can reflect the current state of the continent's economic health and set the tone for sentiment in the near term. Special attention will be paid to Germany's Current Situation Index, as the country, being the locomotive of the European economy, often sets the direction for the entire region. The released data will serve as an important reference point for traders seeking to assess the resilience of the European economy to ongoing challenges.

The impact of the expected data will not be limited to short-term market fluctuations. They could significantly influence the European Central Bank's decisions on interest rates and other monetary policy measures. Positive signals could give the ECB more room to maneuver in tackling inflation, while negative data could force it to take a more cautious stance.

As for the pound, this morning the UK will release data including jobless claims, the unemployment rate, and average earnings growth. This set of indicators will provide important insight into the state of the UK labor market and, consequently, will significantly affect the Bank of England's future monetary policy strategy. The unemployment rate will be closely watched—if it remains stable or continues to decline, it could indicate economic resilience in the face of inflation and geopolitical risks. However, a rise in unemployment could be an alarming sign, indicating slowing economic growth and a possible recession.

If the data matches economists' expectations, it is better to act based on a Mean Reversion strategy. If the data is significantly above or below expectations, it is best to use a Momentum strategy.

Momentum Strategy (Breakout):

EUR/USD

Buying on a breakout above 1.1635 may lead to euro growth toward 1.1672 and 1.1695;

Selling on a breakout below 1.1594 may lead to a decline toward 1.1567 and 1.1530.

GBP/USD

Buying on a breakout above 1.3440 may lead to pound growth toward 1.3472 and 1.3502;

Selling on a breakout below 1.3410 may lead to a decline toward 1.3380 and 1.3350.

USD/JPY

Buying on a breakout above 148.50 may lead to dollar growth toward 148.76 and 149.03;

Selling on a breakout below 148.20 may lead to a decline toward 147.80 and 147.50.

Mean Reversion Strategy (Pullbacks):

EUR/USD

Look for selling opportunities after a failed breakout above 1.1637 with a return below this level;

Look for buying opportunities after a failed breakout below 1.1607 with a return to this level.

GBP/USD

Look for selling opportunities after a failed breakout above 1.3446 with a return below this level;

Look for buying opportunities after a failed breakout below 1.3422 with a return to this level.

AUD/USD

Look for selling opportunities after a failed breakout above 0.6535 with a return below this level;

Look for buying opportunities after a failed breakout below 0.6494 with a return to this level.

USD/CAD

Look for selling opportunities after a failed breakout above 1.3790 with a return below this level;

Look for buying opportunities after a failed breakout below 1.3767 with a return to this level.