The euro and the pound continue to rise, disregarding threats from Trump about possible trade tariffs and statements from the Federal Reserve indicating that interest rates will remain high for an extended period. This resilience is a clear sign of market strength, suggesting that big player are actively involved.

The potential for individualized tariffs, which the U.S. Department of Commerce plans to design for each country separately, created an atmosphere of uncertainty yesterday, discouraging investors from assets sensitive to changes in international trade policy. Despite this, both the euro and the pound have shown remarkable resilience and continued to grow.

However, it's crucial not to overlook the potential chain reaction where countries affected by tariffs might respond with countermeasures. This could exacerbate trade imbalances and negatively impact global economic growth. Experts have varying opinions on the long-term consequences of this policy. Some see it as a tactical strategy to pressure trade partners into more advantageous agreements, while others view it as a precursor to a more serious trade confrontation that could significantly harm the global economy. Nevertheless, as long as risk assets continue to be actively purchased, there is little cause for concern.

Today, during the first half of the trading session, pressure on the euro may return due to anticipated weak data about eurozone GDP growth and employment levels for Q4 2024. Economists forecast GDP stagnation, which will likely negatively affect investor sentiment. Weak employment figures could exacerbate the situation, reinforcing fears of a slowdown in economic growth across the region.

The European Central Bank is expected to continue cutting interest rates following today's data. Any indications of a more aggressive rate-cutting cycle in the future could put additional pressure on the euro. Investors will closely monitor statements from ECB officials for signals regarding the future direction of monetary policy.

If the data aligns with economists' expectations, the Mean Reversion strategy may be the best approach for trading under these conditions. If the data is significantly different from economists' expectations, the Momentum strategy should be employed.

Momentum Strategy (on breakout):

EUR/USD

Buying on the breakout of 1.0468 level may lead to the growth of the euro to the area of 1.0495 and 1.0531;

Selling on a breakout of 1.0424 may lead to a fall of the euro to 1.0376 and 1.0321;

GBP/USD

Buying on the breakout of 1.2568 level may lead to the growth of the pound to the area of 1.2604 and 1.2638;

Selling on a breakthrough of 1.2526 may lead to a fall of the pound to the area of 1.2480 and 1.2434.

USD/JPY

Buying on the breakout of 152.82 level may lead to the dollar growth to the area of 153.19 and 153.65;

Selling on the breakout of 152.42 level may lead to dollar sell-offs to the area of 152.10 and 151.73;

Mean Reversion Strategy (Trading on Pullbacks):

EUR/USD

I will look for sell opportunities after an unsuccessful breakout above 1.0470, upon returning below this level.

I will look for buy opportunities after an unsuccessful breakout below 1.0446, upon returning above this level.

GBP/USD

I will look for sell opportunities after an unsuccessful breakout above 1.2572, upon returning below this level.

I will look for buy opportunities after an unsuccessful breakout below 1.2543, upon returning above this level.

AUD/USD

I will look for sell opportunities after an unsuccessful breakout above 0.6334, upon returning below this level.

I will look for buy opportunities after an unsuccessful breakout below 0.6317, upon returning above this level.

USD/CAD

I will look for sell opportunities after an unsuccessful breakout above 1.4203, upon returning below this level.

I will look for buy opportunities after an unsuccessful breakout below 1.4172, upon returning above this level.