The euro held its ground more or less, while the pound fared significantly worse. A break below the daily low triggered a new, more extensive sell-off in GBP/USD, effectively establishing a new bearish market trend.

Yesterday's weak eurozone data did little to support the euro, while the Federal Reserve's emergency meeting revived demand for the dollar in risk-related currency pairs. In the short term, the dollar may continue to strengthen. However, even though the market has likely already priced in expectations of a more aggressive Fed policy, any unexpected dovish signals could prompt a correction. From a medium-term perspective, fundamental factors favor the dollar.

The European economy is still facing more serious challenges than the U.S. economy. The energy crisis, high inflation risks due to tariffs, and geopolitical uncertainty continue to pressure the eurozone. Meanwhile, the U.S. economy remains resilient despite new trade tariffs, supported by a strong labor market and the Fed's more aggressive policy stance.

Today, aside from France's trade balance data, there are no other notable macro releases, which leaves euro buyers with limited chances of pushing the pair higher. Investors will likely assess the trade data regarding its impact on the eurozone's overall economic activity. Weak figures could heighten recession fears and pressure the European Central Bank to slow its pace of rate hikes. But even if France's trade balance beats expectations, that may not be enough to shift the broader outlook for the euro.

Bank of England officials in the UK are scheduled to speak today, which might help temporarily halt the bearish momentum seen in recent sessions. However, it's unlikely their comments will trigger a trend reversal.

If the data meets economists' expectations, it's best to trade using a Mean Reversion strategy. A Momentum strategy is recommended if the data comes in significantly higher or lower than expected.

Momentum Strategy (Breakout):

EUR/USD

Buying on a breakout above 1.0985 could lead to a rise toward 1.1045 and 1.1085.

Selling on a breakout below 1.0940 could lead to a decline toward 1.0885 and 1.0845.

GBP/USD

Buying on a breakout above 1.2800 could push the pound toward 1.2842 and 1.2887.

Selling on a breakout below 1.2754 could trigger a fall toward 1.2711 and 1.2679.

USD/JPY

Buying on a breakout above 147.85 could lead to an advance toward 148.20 and 148.58.

Selling on a breakout below 147.52 could lead to a decline toward 147.18 and 146.78.

Mean Reversion Strategy (Pullbacks):

EUR/USD

Look for short positions after a failed breakout above 1.0992 and a return below it.

Look for long positions after a failed breakout below 1.0921 and a return above it.

GBP/USD

Look for short positions after a failed breakout above 1.2808 and a return below it.

Look for long positions after a failed breakout below 1.2739 and a return above it.

AUD/USD

Look for short positions after a failed breakout above 0.6083 and a return below it.

Look for long positions after a failed breakout below 0.6029 and a return above it.

USD/CAD

Look for short positions after a failed breakout above 1.4182 and a return below it.

Look for long positions after a failed breakout below 1.4123 and a return above it.