Only the British pound could be traded in the first half of the day using the Mean Reversion strategy, but a proper downward reversal never materialized. I did not trade anything using the Momentum strategy.
Ahead of the U.S. trading session, market participants are focused on the release of important macroeconomic indicators that could significantly impact the dollar's exchange rate. The key data will be the U.S. labor market figures for March. The report on changes in nonfarm employment is expected. This indicator is one of the most relevant for assessing the state of the U.S. economy, as it reflects activity across most sectors.
Given the sharp decline in employment in February, many expect a solid rebound in March. Stronger-than-forecast figures could signal increased economic activity and rising inflationary pressure, while weaker results may raise concerns about a slowdown in growth.
At the same time, data on the unemployment rate will be released, which is also a crucial barometer of labor market health. A decline in unemployment is traditionally seen as a positive signal, indicating high employment and stable demand for labor.
In addition, investors will focus on average hourly earnings. Growth in this indicator may point to rising disposable income, which in turn stimulates consumer activity.
In the case of strong data, I will rely on the Momentum strategy. If there is no market reaction to the data, I will continue using the Mean Reversion strategy.
Momentum Strategy (Breakout) for the Second Half of the Day
For EUR/USD:
- Buying on a breakout above 1.1557 may lead to euro growth toward 1.1593 and 1.1628
- Selling on a breakout below 1.1516 may lead to a decline toward 1.1485 and 1.1445
For GBP/USD:
- Buying on a breakout above 1.3248 may lead to pound growth toward 1.3282 and 1.3317
- Selling on a breakout below 1.3213 may lead to a decline toward 1.3182 and 1.3162
For USD/JPY:
- Buying on a breakout above 159.75 may lead to dollar growth toward 159.95 and 160.20
- Selling on a breakout below 159.50 may lead to dollar selling toward 159.30 and 159.10
Mean Reversion Strategy (Pullback) for the Second Half of the Day
For EUR/USD:
- I will look for selling opportunities after a failed breakout above 1.1554 followed by a return below this level
- I will look for buying opportunities after a failed breakout below 1.1526 followed by a return to this level
For GBP/USD:
- I will look for selling opportunities after a failed breakout above 1.3247 followed by a return below this level
- I will look for buying opportunities after a failed breakout below 1.3213 followed by a return to this level
For AUD/USD:
- I will look for selling opportunities after a failed breakout above 0.6921 followed by a return below this level
- I will look for buying opportunities after a failed breakout below 0.6901 followed by a return to this level
For USD/CAD:
- I will look for selling opportunities after a failed breakout above 1.3929 followed by a return below this level
- I will look for buying opportunities after a failed breakout below 1.3912 followed by a return to this level
