The US dollar declined sharply following weak economic fundamentals and President Donald Trump's defeat in the Supreme Court over the imposition of tariffs.

The Supreme Court's decision dealt a serious blow to the Trump administration's protectionist policies, stripping it of one of its key tools for pressuring trade partners. The markets interpreted this as a signal of uncertainty about the US's future trade relations with other countries, triggering a panic among investors. Currency fluctuations reflected this nervousness, and the dollar, traditionally considered a safe haven during turbulent times, declined noticeably.

Despite the legal setback, President Trump has not abandoned his plans. His rhetoric has become more aggressive, and promises to impose new tariffs or find workarounds to maintain existing measures have sparked a new wave of concerns.

Today promises to be quite eventful for financial markets, with particular emphasis on economic news from Europe. In the first half of the day, investors will focus on Germany, where several key macroeconomic indicators will be released that could set the tone for trading. Of particular interest are the IFO Economic Institute's data. Three key indicators are expected: the business climate index, the current situation index, and the economic expectations index. These indicators serve as barometers of the German economy, reflecting business sentiment on current conditions and future prospects. Positive readings from these indices that exceed analysts' expectations could be a positive signal for the euro.

In addition to the German data, inflation results from Italy will also be released today.

As for the British pound, no significant report is expected from the UK today. This creates a favorable environment for speculative trades and further buying of the pound. The lack of fresh macroeconomic reports will deprive the market of concrete reasons for corrective movements following the morning rise, which may, in turn, strengthen the existing trend.

If the data aligns with economists' expectations, it would be better to act based on the Mean Reversion strategy. If the data turns out to be significantly higher or lower than economists' expectations, a Momentum strategy would be most appropriate.

Momentum Strategy (Breakout):

For the EUR/USD Pair

• Buy on a breakout of 1.1835, which may lead to a rise in the euro to around 1.1857 and 1.1883;
• Sell on a breakout of 1.1810, which may lead to a decline in the euro to around 1.1787 and 1.1767;

For the GBP/USD Pair

• Buy on a breakout of 1.3537, which may lead to a rise in the pound to around 1.3560 and 1.3599;
• Sell on a breakout of 1.3505, which may lead to a decline in the pound to around 1.3475 and 1.3435;

For the USD/JPY Pair

• Buy on a breakout of 154.63, which may lead to a rise in the dollar to around 154.95 and 155.32;
• Sell on a breakout of 154.30, which may lead to a decline in the dollar to around 154.00 and 153.70;

Mean Reversion Strategy (Retracement):

For the EUR/USD Pair

• Look for short positions after a failed breakout above 1.1836 on a retracement below this level;
• Look for long positions after a failed breakout below 1.1810 on a retracement back to this level;

For the GBP/USD Pair

• Look for shorts after a failed breakout above 1.3532 on a retracement below this level;
• Look for longs after a failed breakout below 1.3502 on a retracement back to this level;

For the AUD/USD Pair

• Look for shorts after a failed breakout above 0.7090 on a retracement below this level;
• Look for longs after a failed breakout below 0.7060 on a retracement back to this level;

For the USD/CAD Pair

• Look for shorts after a failed breakout above 1.3679 on a retracement below this level;
• Look for longs after a failed breakout below 1.3655 on a retracement back to this level;