The pound has fallen sharply, and the euro is preparing to follow suit.

Tensions in the Middle East are escalating, and the prospect of a potential ground military operation by the US in Iran is one of the key factors affecting global financial markets. Such a scenario, currently considered quite likely, could provoke significant volatility and trigger a chain of repercussions across various asset classes. In the event of escalating conflict, traders will likely resort to a flight-to-quality strategy, selling riskier assets such as the euro, the pound, and other emerging-market currencies. Among the main beneficiaries of such developments will likely be the US dollar. As a safe-haven currency, the dollar typically strengthens during periods of geopolitical uncertainty and financial turmoil. The increased demand for dollars, driven by traders' desire to preserve capital, will lead to its appreciation against a basket of major world currencies.

Today's data releases are limited to the publication of the Eurozone consumer confidence index for March. This macroeconomic indicator, which reflects consumers' sentiments regarding the current economic situation and their future outlook, is an important benchmark for assessing the overall state of the economy in the region. Preliminary data and forecasts indicate a possible decline in this index. A decrease in consumer confidence may, in turn, signal a weakening of consumer demand, one of the key drivers of economic growth in the Eurozone, thereby undermining the euro's position.

As for the pound, there is no significant impact expected from macroeconomic data on the UK financial markets today. The absence of new data means that existing factors influencing the pound sterling will likely be insufficient to lead to radical changes in its exchange rate. Therefore, the GBP/USD pair could decline at any time. Without fresh data that could provide investors with new reasons to reassess their positions, the pound will likely follow the downward trend established last Friday.

If the data aligns with economists' expectations, it is better to act based on the Mean Reversion strategy. If the data comes in significantly higher or lower than economists' expectations, it is best to employ the Momentum strategy.

Momentum Strategy (Breakout):

For the EUR/USD Pair

• Buy on a breakout at 1.1550, which could lead to a rise in the euro to around 1.1588 and 1.1614;
• Sell on a breakout at 1.1525, which could lead to a drop in the euro to around 1.1501 and 1.1475;

For the GBP/USD Pair

• Buy on a breakout at 1.3315, which could lead to a rise in the pound to around 1.3350 and 1.3375;
• Sell on a breakout at 1.3290, which could lead to a drop in the pound to around 1.3260 and 1.3220;

For the USD/JPY Pair

• Buy on a breakout at 159.75, which could lead to a rise in the dollar to around 159.98 and 160.21;
• Sell on a breakout at 159.45, which could lead to a decline in the dollar to around 159.18 and 158.87;

Mean Reversion Strategy (Return):

For the EUR/USD Pair

• Look for sell opportunities after a failure to break through 1.1559 on a return below this level;
• Look for buy opportunities after a failure to break through 1.1530 on a return to this level;

For the GBP/USD Pair

• Look for sell opportunities after a failure to break through 1.3338 on a return below this level;
• Look for buy opportunities after a failure to break through 1.3284 on a return to this level;

For the AUD/USD Pair

• Look for sell opportunities after a failure to break through 0.6987 on a return below this level;
• Look for buy opportunities after a failure to break through 0.6954 on a return to this level;

For the USD/CAD Pair

• Look for sell opportunities after a failure to break through 1.3737 on a return below this level;
• Look for buy opportunities after a failure to break through 1.3712 on a return to this level;