As the data showed, the Eurozone Manufacturing PMI declined to 51.3 from 52.3 in April, while in the United Kingdom the indicator rose to 53.9. Both readings remain above the 50-point threshold, which is traditionally interpreted as a sign of expansion in the sector.
Next, close attention will be paid to the release of the U.S. ISM Manufacturing PMI. These data play a key role in shaping economic trends, as the condition of the U.S. industrial sector directly affects demand and inflation. If the ISM index shows positive dynamics, exceeds analyst forecasts, and maintains the positive trend of previous periods, it will undoubtedly have a supportive effect on the U.S. dollar. In the context of global economic uncertainty, such figures may attract additional capital into U.S. assets.
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
EUR/USD
- Buy on a breakout above 1.1660, targeting 1.1680 and 1.1699
- Sell on a breakout below 1.1645, targeting 1.1625 and 1.1585
GBP/USD
- Buy on a breakout above 1.3480, targeting 1.3510 and 1.3535
- Sell on a breakout below 1.3445, targeting 1.3410 and 1.3370
USD/JPY
- Buy on a breakout above 159.60, targeting 159.85 and 160.02
- Sell on a breakout below 159.40, targeting 159.15 and 158.80
Mean Reversion Strategy (Reversion) for the Second Half of the Day
EUR/USD
- Sell after a failed breakout above 1.1669, on a return below this level
- Buy after a failed breakdown below 1.1637, on a return above this level
GBP/USD
- Sell after a failed breakout above 1.3477, on a return below this level
- Buy after a failed breakdown below 1.3440, on a return above this level
AUD/USD
- Sell after a failed breakout above 0.7197, on a return below this level
- Buy after a failed breakdown below 0.7175, on a return above this level
USD/CAD
- Sell after a failed breakout above 1.3829, on a return below this level
- Buy after a failed breakdown below 1.3800, on a return above this level
