As we can see, the war in the Middle East, at least between the US and Iran, seems to be coming to a logical conclusion.

Today, the US dollar has declined, and risk assets reacted positively to the news that the US and Iran have officially announced a temporary peace agreement. It is expected that the official agreement will be signed on June 19. Markets that have recently been in a state of tense anticipation have now reacted with relief to the first signs of de-escalation of the months-long conflict. The strengthening of the euro, pound, and other risk assets can be explained not only as a reaction to the weakening dollar but also as a consequence of expectations for the restoration of trade relations and a reduction in geopolitical tensions in the region. Traders who previously avoided operations associated with heightened risk are now showing increased interest in such operations.

Regarding data, reports on the eurozone trade balance and changes in industrial production are expected in the first half of the day. These economic indicators are important indicators of the health of the eurozone and may influence the further movement of the single European currency. The trade balance reflects the difference between exports and imports of goods and services, and a positive value indicates that exports exceed imports. This, in turn, points to the economy's competitiveness. Changes in industrial production provide insight into the dynamics of the manufacturing sector, a key driver of economic growth. Recovery or growth in this segment signals increased business activity, which positively affects overall economic prospects.

Positive data on the eurozone's trade and industrial production, along with news of the peace agreement, are expected to create a favorable environment for further strengthening of the euro.

As for the pound, it would be good to get positive figures for the UK economy to support its active buying, but no important reports are scheduled for today. The absence of new macroeconomic data from the United Kingdom means that traders' attention will likely shift to other markets and global factors. This could create a temporary pause in the growth of the British pound until new reasons for optimism or pessimism emerge. At the same time, the positive global news on the Middle East settlement, along with anticipated positive reports from the eurozone, may partially offset the lack of British data.

If the data align with economists' expectations, it would be best to act based on the Mean Reversion strategy. If the data come in significantly above or below economists' expectations, the Momentum strategy is the most appropriate.

Momentum Strategy (on Breakouts):

For the EUR/USD Pair

Long positions on a breakout of level 1.1625 may lead to an increase in the euro to the area of 1.1645 and 1.1664;

Short positions on a breakout of level 1.1595 may lead to a decrease in the euro to the area of 1.1566 and 1.1535;

For the GBP/USD Pair

Longs on a breakout of level 1.3452 may lead to an increase in the pound to the area of 1.3478 and 1.3509;

Shorts on a breakout of level 1.3420 may lead to a decrease in the pound to the area of 1.3388 and 1.3359;

For the USD/JPY Pair

Longs on a breakout of level 160.24 may lead to an increase in the dollar to the area of 160.43 and 160.67;

Shorts on a breakout of level 160.02 may lead to a drop in the dollar to the area of 159.83 and 159.60;

Mean Reversion Strategy (on Retracements):

For the EUR/USD Pair

Shorts will be sought after an unsuccessful breakout above 1.1635 on a return below this level;

Longs will be sought after an unsuccessful breakout below 1.1585 on a return above this level;

For the GBP/USD Pair

Shorts will be sought after an unsuccessful breakout above 1.3463 on a return below this level;

Longs will be sought after an unsuccessful breakout below 1.3422 on a return above this level;

For the AUD/USD Pair

Shorts will be sought after an unsuccessful breakout above 0.7104 on a return below this level;

Longs will be sought after an unsuccessful breakout below 0.7065 on a return above this level;

For the USD/CAD Pair

Shorts will be sought after an unsuccessful breakout above 1.3971 on a return below this level;

Longs will be sought after an unsuccessful breakout below 1.3940 on a return above this level;