FX.co ★ Level and Target Adjustments for the U.S. Session – July 9th

Today, only the Australian dollar generated a trading opportunity based on the Mean Reversion strategy. I did not take any Momentum trades.

The euro advanced today following news that Germany's trade surplus increased to €19.1 billion. This marks the largest monthly surplus since February and a notable rebound after several months of narrowing trade balances. Investors and traders interpreted the data as a sign of resilience in the German economy, which remains the driving force behind the eurozone.

Today's key event is the speech by FOMC member John Williams, made even more significant by yesterday's hawkish Federal Reserve meeting minutes. After the Fed removed any indication of potential policy easing, every comment from its officials is now viewed as a clue to the central bank's next move. As a result, traders will closely monitor Williams' remarks for any indication of the Fed's willingness to raise interest rates. A hawkish tone could reinforce the U.S. dollar's strength, while more cautious comments may temper demand for the greenback.

In addition to Williams' speech, today's calendar includes two macroeconomic releases. The weekly Initial Jobless Claims report provides a timely measure of labor market conditions by showing how many Americans filed for unemployment benefits for the first time. Meanwhile, Existing Home Sales data reflects activity in a major segment of the U.S. economy and offers an indirect gauge of consumer confidence. For the euro, the primary risk comes from Williams' speech, as confirmation of the Fed's hawkish stance would likely put downward pressure on EUR/USD, while strong labor market data would reinforce that effect. The pound is expected to follow a similar pattern, with a more hawkish Fed rhetoric likely weighing on GBP/USD.

If the economic data comes in stronger than expected, I will rely on the Momentum strategy. If the market shows little or no reaction to the releases, I will continue using the Mean Reversion strategy.

Momentum Strategy (Breakout Trading) for the U.S. Session

EUR/USD

• A breakout above 1.1440 may lead to a rise toward 1.1466 and 1.1486.
• A breakout below 1.1417 may trigger a decline toward 1.1390 and 1.1365.

GBP/USD

• A breakout above 1.3428 may push the pound toward 1.3462 and 1.3481.
• A breakout below 1.3390 may lead to a decline toward 1.3356 and 1.3323.

USD/JPY

• A breakout above 162.64 may lift the dollar toward 162.92 and 163.18.
• A breakout below 162.34 may trigger a sell-off toward 162.08 and 161.83.

Mean Reversion Strategy for the U.S. Session

EUR/USD

• I will look for short positions if the pair fails to hold above 1.1445 and returns below this level.
• I will look for long positions if the pair briefly falls below 1.1420 and then rebounds back above this level.

GBP/USD

• I will look for short positions if the pair fails to hold above 1.3429 and returns below this level.
• I will look for long positions if the pair briefly falls below 1.3395 and then rebounds back above this level.

AUD/USD

• I will look for short positions if the pair fails to hold above 0.6947 and returns below this level.
• I will look for long positions if the pair briefly falls below 0.6928 and then rebounds back above this level.

USD/CAD

• I will look for short positions if the pair fails to hold above 1.4193 and returns below this level.
• I will look for long positions if the pair briefly falls below 1.4165 and then rebounds back above this level.