Last Friday, the euro and the pound managed to hold their ground under selling pressure without showing any downward correction at the end of the week.

Friday's speech by Federal Reserve representative Alberto Musalem went largely unnoticed by the market, which likely kept pressure on the dollar. Traders seemed even more uncertain about the Fed's future interest rate policy, awaiting clearer signals from more influential members of the Federal Open Market Committee. Musalem, in particular, noted the persistence of inflation and the need for further monitoring of economic data before making final decisions. This neutral tone offered no new insights, resulting in a relatively calm reaction in the currency market.

However, the absence of a reaction should not be interpreted as indifference. On the contrary, it may reflect a general sense of uncertainty and readiness for volatility ahead of upcoming key economic data releases.

Unfortunately, apart from Italy's foreign trade balance, there are no other data today, so the euro will likely remain attractive. This attractiveness, however, is not absolute and is influenced by several factors beyond today's limited macroeconomic picture.

Indeed, a favorable Italian trade balance could support the euro, strengthening investor confidence in the stability of the Italian economy and its contribution to overall European economic growth. At the same time, it is necessary to consider other global risk factors, such as geopolitical tensions stemming from Trump's trade policy and expected changes in central bank monetary policies.

An Italian trade surplus, reflecting exports exceeding imports, can have a positive impact on the euro's exchange rate. This fact indicates the sustained competitiveness of Italy's economic sector and its ability to operate effectively in the global market.

If the data matches economists' expectations, it would be better to act based on a Mean Reversion strategy. If the data is significantly above or below expectations, it is best to use a Momentum strategy.

Momentum Strategy (Breakout):

EUR/USD

Buying on a breakout above 1.1680 may lead to euro growth toward 1.1720 and 1.1740;

Selling on a breakout below 1.1655 may lead to a euro decline toward 1.1615 and 1.1567.

GBP/USD

Buying on a breakout above 1.3475 may lead to pound growth toward 1.3510 and 1.3540;

Selling on a breakout below 1.3440 may lead to a pound decline toward 1.3410 and 1.3370.

USD/JPY

Buying on a breakout above 147.59 may lead to dollar growth toward 147.93 and 148.23;

Selling on a breakout below 147.25 may lead to dollar selling toward 146.90 and 146.65.

Mean Reversion Strategy (Pullbacks):

EUR/USD

Look for selling opportunities after an unsuccessful breakout above 1.1690 with a return below this level;

Look for buying opportunities after an unsuccessful breakout below 1.1650 with a return to this level.

GBP/USD

Look for selling opportunities after an unsuccessful breakout above 1.3474 with a return below this level;

Look for buying opportunities after an unsuccessful breakout below 1.3435 with a return to this level.

AUD/USD

Look for selling opportunities after an unsuccessful breakout above 0.6534 with a return below this level;

Look for buying opportunities after an unsuccessful breakout below 0.6512 with a return to this level.

USD/CAD

Look for selling opportunities after an unsuccessful breakout above 1.3764 with a return below this level;

Look for buying opportunities after an unsuccessful breakout below 1.3738 with a return to this level.