The euro and pound remain within the channels despite buyers' apparent desire for a more substantial correction. However, economic data that continue to favor the U.S. dollar are hindering this.

During the latest Federal Reserve meeting, economic indicators showed resilience despite ongoing challenges. Officials expressed confidence that a gradual reduction in interest rates might be appropriate, depending on developments in the labor market and consumer price dynamics. They emphasized that a "step-by-step" approach would help avoid sharp fluctuations and allow the economy to adapt to new conditions. However, the minutes did not boost confidence in a December rate cut, which supported the dollar against several risk assets.

Despite slowing inflation, it remains above target levels, necessitating a cautious approach to future monetary policy. Officials stressed the importance of maintaining a balance between stimulating economic growth and controlling inflationary risks. This cautious stance reflects the Federal Reserve's intent to act predictably and thoughtfully, bolsters investor and trader confidence.

Today, the only significant release from the eurozone is the German Consumer Climate Index, a leading indicator of public sentiment. While important, it is unlikely to impact the forex market substantially. As such, further attempts by euro and other risk asset buyers to continue this week's observed upward correction are expected.

The Mean Reversion strategy is recommended if eurozone data matches economists' expectations. If data significantly exceeds or falls short of expectations, the Momentum strategy would be more effective.

Momentum Strategy (Breakout-Based):

EUR/USD:

• Buy on a breakout above 1.0497, may lead to the euro growing to the area of 1.0542 and 1.0575.
• Sell on a breakout below 1.0441, may lead to the euro falling to the area of 1.0383 and 1.0333.

GBP/USD:

• Buy on a breakout above 1.2608, may lead to the pound growing to the area of 1.2654 and 1.2710.
• Sell on a breakout below 1.2556, may lead to the pound falling to the area of 1.2509 and 1.2464.

USD/JPY:

• Buy on a breakout above 152.74, may lead to the dollar growing to the area of 153.19 and 153.57.
• Sell on a breakout below 152.42, may lead to dollar sell-offs in the 152.10 and 151.84 area.

Mean Reversion Strategy:

For EUR/USD:

• I will look for sell opportunities after a failed breakout above 1.0510 on a return below this level.
• I will look for buy opportunities after a failed breakout below 1.0465 on a return above this level.

For GBP/USD:

• I will look for sell opportunities after a failed breakout above 1.2597 on a return below this level.
• I will look for buy opportunities after a failed breakout below 1.2560 on a return above this level.

For AUD/USD:

• I will look for sell opportunities after a failed breakout above 0.6492 on a return below this level.
• I will look for buy opportunities after a failed breakout below 0.6466 on a return above this level.

For USD/CAD:

• I will look for sell opportunities after a failed breakout above 1.4081 on a return below this level.
• I will look for buy opportunities after a failed breakout below 1.4032 on a return above this level.