The euro, the pound, and other risk assets have risen significantly against the U.S. dollar, despite few objective reasons.

Despite the lack of an agreement and failed peace talks between the U.S. and Iran, the maintenance of the ceasefire has encouraged buyers, leading to a sharp withdrawal from dollar positions that had been built up previously. The markets seem to have come to terms with the likelihood of a prolonged, although incomplete, ceasefire. The absence of escalation from both sides has allowed traders to relax their vigilance and refocus on fundamental indicators, downplaying geopolitical risks. This change in sentiment has led to a notable outflow of capital from defensive assets, such as the U.S. dollar, and an influx into riskier instruments.

The first half of the day today does not promise to be rich in economic news; however, even a modest news flow may influence individual European currencies. Germany's wholesale price index is expected to be published, providing insight into price pressures on production. Following that, data on the consumer price index in Spain will be presented, reflecting the inflation situation in the largest economy on the Iberian Peninsula. These indicators, while not key market drivers, may serve as a starting point for short-term speculation. Weak wholesale price data in Germany could heighten concerns about a slowdown in the German economy, which, in turn, may put pressure on the euro. Similarly, higher-than-expected inflation in Spain could prompt the European Central Bank toward a more cautious policy.

As for the British pound, today's market activity will be characterized by close attention to the speeches of representatives from the Bank of England. Comments from Governor Andrew Bailey are expected, whose words traditionally carry significant weight in shaping monetary expectations. In addition, Committee member Catherine L. Mann will be speaking. The markets will carefully analyze any hints regarding the future trajectory of interest rates. Any signals about a potential tightening or easing of the Bank of England's monetary policy could provoke significant movements in the currency and bond markets. Particular interest lies in assessments of inflation risks and economic growth prospects, which are likely to be voiced by the speakers.

If the data aligns with economists' expectations, it is advisable to act based on the Mean Reversion strategy. If the data deviates significantly higher or lower than economists' expectations, the Momentum strategy is the best choice.

Momentum Strategy (Breakout):

For the EURUSD pair

Buy on a breakout of 1.1770, which may lead to an increase in the euro to around 1.1795 and 1.1825;

Sell on a breakout of 1.1750, which may lead to a decrease in the euro to around 1.1730 and 1.1705;

For the GBPUSD pair

Buy on a breakout of 1.3525, which may lead to an increase in the pound to around 1.3545 and 1.3575;

Sell on a breakout of 1.3505, which may lead to a decrease in the pound to around 1.3477 and 1.3450;

For the USDJPY pair

Buy on a breakout of 159.35, which may lead to an increase in the dollar to around 159.60 and 159.85;

Sell on a breakout of 159.00, which may lead to a sale of the dollar to around 158.80 and 158.55;

Mean Reversion Strategy (Return):

For the EURUSD pair

I will look for short positions after an unsuccessful breakout beyond 1.1774 on a return below that level;

I will look for long positions after an unsuccessful breakout beyond 1.1752 on a return to that level;

For the GBPUSD pair

I will look for shorts after an unsuccessful breakout beyond 1.3525 on a return below that level;

I will look for longs after an unsuccessful breakout beyond 1.3493 on a return to that level;

For the AUDUSD pair

I will look for shorts after an unsuccessful breakout beyond 0.7097 on a return below that level;

I will look for longs after an unsuccessful breakout beyond 0.7072 on a return to that level;

For the USDCAD pair

I will look for shorts after an unsuccessful breakout beyond 1.3794 on a return below that level;

I will look for longs after an unsuccessful breakout beyond 1.3779 on a return to that level;