The euro, pound, and other risk assets continue to show strength against the US dollar.

Yesterday, amid a lack of key data, the euro continued to strengthen against the US dollar, reaching a weekly high. The pound also strengthened as many traders bet on the imminent conclusion of the shutdown in the US. However, despite the optimistic sentiment, some caution remains. Even after the shutdown ends, its consequences will be felt by the American economy for some time. Specifically, this concerns delays in the publication of important macroeconomic data, which will not be prepared in a single day and will take quite some time.

Today, in the first half of the day, figures for the Consumer Price Index and changes in industrial production in Italy will be released. These data will serve as an important indicator of the country's economic state and may influence the euro's exchange rate. High inflation figures may prompt the European Central Bank to maintain a wait-and-see position on interest rates, which would support the euro. At the same time, growth in industrial production will indicate a strengthening economy and increased demand for goods and services. The impact of this data will be particularly noticeable in the context of the current situation in the US. Expectations of an imminent end to the shutdown in the US, as noted earlier, are putting pressure on the dollar. However, if the Italian data turn out to be weak, this could offset this factor and lead to a weakening of the euro.

Regarding the pound, aside from today's speech by Bank of England Monetary Policy Committee member Huw Pill, no other data are scheduled, so the market's focus will shift entirely to his statements. Traders are closely monitoring his every word, looking for hints about the BoE's future monetary policy. His comments on fighting inflation, prospects for economic growth, and future actions regarding interest rates will be particularly important.

If the data aligns with economists' expectations, it is better to act on the Mean Reversion strategy. If the data is significantly above or below economists' expectations, the Momentum strategy will be most effective.

Momentum Strategy (Breakout):

For the EUR/USD Pair:

• Buy on a breakout above 1.1595, which may drive the euro to around 1.1610 and 1.1645.
• Sell on a breakout below the level of 1.1570, which may lead the euro down to around 1.1543 and 1.1521.

For the GBP/USD Pair:

• Buy on a breakout above the level of 1.3151, which may push the pound up to around 1.3181 and 1.3216.
• Sell on a breakout below the level of 1.3116, which may cause the pound to drop to around 1.3086 and 1.3052.

For the USD/JPY Pair:

• Buy on a breakout above the level of 154.77, which may lead the dollar up to around 155.35 and 155.87.
• Sell on a breakout below the level of 154.31, which may lead to a drop in the dollar to around 153.80 and 153.27.

Mean Reversion Strategy (Pullback):

For the EUR/USD Pair:

• Look for sell opportunities after a failed breakout above 1.1589 and a subsequent return below this level.
• Look for buy opportunities after a failed breakout above 1.1568 and a subsequent return to this level.

For the GBP/USD Pair:

• Look for sell opportunities after a failed breakout above 1.3157 and a subsequent return below this level.
• Look for buy opportunities after a failed breakout above 1.3122 and a subsequent return to this level.

For the AUD/USD Pair:

• Look for sell opportunities after a failed breakout above 0.6538 and a subsequent return below this level.
• Look for buy opportunities after a failed breakout above 0.6515 and a subsequent return to this level.

For the USD/CAD Pair:

• Look for sell opportunities after a failed breakout above 1.4023 and a subsequent return below this level.
• Look for buy opportunities after a failed breakout above 1.4003 and a subsequent return to this level.