The dollar gained the initiative against risky assets yesterday, but it did not lead to significant technical changes in the market. Everyone is awaiting news from Trump and the Middle East.
Yesterday marked a significant strengthening of the US dollar, which was directly linked to the release of the PMI data for the US services sector. The report showed that the index remained comfortably above the key 54.0-point mark, indicating sustained resilience and dynamic growth in this sector of the economy. A level above 50 points in the PMI index is traditionally interpreted as a signal of expanding business activity. This unambiguously indicates that the services sector, the locomotive of the American economy, demonstrates enviable viability despite potential global challenges and uncertainties.
Today, in the first half of the day, all market participants' attention will be focused on important macroeconomic indicators coming from the Eurozone. Special interest is directed towards the data on the services PMI. This indicator is one of the key barometers of the region's economic state, reflecting dynamics in one of the most significant sectors. The publication of the composite PMI index will also play an important role in shaping market sentiment. This indicator, which combines data on industrial production and the services sector, provides a more comprehensive view of overall economic activity.
In addition, investors' attention will be concentrated on the Sentix investor confidence indicator. This survey reflects market participants' expectations regarding future economic conditions. A high confidence level may signal investors' readiness to invest, while a decline could indicate rising concerns and caution.
Regarding the British pound, the first half of the day also promises to be eventful. Market participants are anxiously awaiting the release of the services PMI data for March this year. This indicator is one of the key barometers of the British economy's state, reflecting dynamics in one of its most significant drivers. The expected data release may provide a clear picture of whether the positive momentum in this sector has been maintained or whether we will see signs of a slowdown.
The publication of the composite PMI index will also be significant. This indicator, which sums up the data from both the manufacturing and services sectors, will provide a more holistic view of the country's economic activity. Weak values in either of these indices, especially both, could trigger a more active phase of selling the British pound.
If the data coincides with economists' expectations, it is better to act based on the Mean Reversion strategy. If the data is significantly above or below economists' expectations, it is best to use the Momentum strategy.
Momentum Strategy (Breakout):For the EURUSD PairBuy on a breakout of level 1.1550 may lead to a rise of the euro towards 1.1570 and 1.1590;
Sell on a breakout of level 1.1525 may lead to a drop of the euro towards 1.1505 and 1.1480;
For the GBPUSD PairBuy on a breakout of level 1.3242 may lead to a rise of the pound towards 1.3266 and 1.3290;
Sell on a breakout of level 1.3212 may lead to a drop of the pound towards 1.3182 and 1.3160;
For the USDJPY PairBuy on a breakout of level 159.94 may lead to a rise of the dollar towards 160.24 and 160.54;
Sell on a breakout of level 159.70 may lead to a sell-off of the dollar towards 159.40 and 159.20;
Mean Reversion Strategy (Retracement):Sell after a failed breakout above 1.1550 on a return below this level;
Buy after a failed breakout below 1.1523 on a return to this level;
Sell after a failed breakout above 1.3244 on a return below this level;
Buy after a failed breakout below 1.3210 on a return to this level;
Sell after a failed breakout above 0.6929 on a return below this level;
Buy after a failed breakout below 0.6897 on a return to this level;
Sell after a failed breakout above 1.3933 on a return below this level;
Buy after a failed breakout below 1.3907 on a return to this level;