FX.co ★ Level and Target Adjustments for the U.S. Session – July 10th

Nothing noteworthy occurred during the first half of the day, and due to lower volatility, the Mean Reversion strategy did not generate any trading opportunities. I traded only USD/JPY using the Momentum strategy, but even there, the market failed to produce a strong move.

The second half of the US session will also be free of major macroeconomic data releases and speeches by Federal Reserve officials, meaning the market's attention will shift to geopolitical developments. In the absence of the usual catalysts—such as inflation or employment data, which typically shape interest rate expectations and drive the US dollar—traders will closely monitor developments in the Middle East and any unexpected statements from Donald Trump. These unpredictable factors are likely to become the primary drivers of currency market movements over the next several hours.

If market conditions remain calm, demand for the US dollar is likely to persist, as traders may prefer to increase their dollar exposure in the absence of fresh catalysts. For the euro, this suggests limited upward potential, as EUR/USD is likely to struggle to advance while the US dollar remains in demand. The British pound is expected to face a similar situation, with its performance against the dollar largely determined by overall risk sentiment and news from the Middle East, given the lack of domestic catalysts.

If strong economic data is released, I will base my trading decisions on the Momentum strategy. If the market shows little or no reaction to the data, I will continue using the Mean Reversion strategy.

Momentum Strategy (Breakout Trading) for the US Session

EUR/USD

• A breakout above 1.1440 could push the euro toward 1.1466 and 1.1486.
• A breakout below 1.1423 could send the euro down toward 1.1390 and 1.1365.

GBP/USD

• A breakout above 1.3428 could lift the pound toward 1.3462 and 1.3481.
• A breakout below 1.3390 could drive the pound lower toward 1.3356 and 1.3323.

USD/JPY

• A breakout above 161.85 could push the US dollar toward 162.08 and 162.34.
• A breakout below 161.62 could trigger a decline toward 161.33 and 161.10.

Mean Reversion Strategy for the US Session

EUR/USD

• I will look for short positions after a false breakout above 1.1450, followed by a move back below this level.
• I will look for long positions after a false breakout below 1.1425, followed by a recovery back above this level.

GBP/USD

• I will look for short positions after a false breakout above 1.3428, followed by a move back below this level.
• I will look for long positions after a false breakout below 1.3397, followed by a recovery back above this level.

AUD/USD

• I will look for short positions after a false breakout above 0.6958, followed by a move back below this level.
• I will look for long positions after a false breakout below 0.6938, followed by a recovery back above this level.

USD/CAD

• I will look for short positions after a false breakout above 1.4175, followed by a move back below this level.
• I will look for long positions after a false breakout below 1.4148, followed by a recovery back above this level.