The US dollar has shown strong growth against the euro, pound, and other risk assets.

Demand for the dollar surged yesterday after the US carried out a series of strikes against Iranian military targets. Geopolitical tensions in the Middle East have recently increased the appeal of the dollar as a safe haven for traders, pushing them away from riskier assets. Against the backdrop of renewed escalation in the conflict, expectations for global economic growth have become more pessimistic, which in turn has driven investors to seek safer assets, including the US currency. However, at this moment, traders are more concerned about inflation and its spread than about the economic growth slowdown.

Today, the first half of the day promises to be filled with important economic events from the Eurozone, which could have a significant impact on financial markets. Firstly, key macroeconomic indicators from Germany, the locomotive of the European economy, are expected to be released. Traders will closely examine the data on changes in industrial production volumes, which will provide insight into the current state of the German manufacturing sector and its ability to generate economic growth. Any deviations from forecasts, positive or negative, could trigger market volatility.

Equally important is the release of data on the German trade balance. This indicator reflects the difference between exports and imports of goods and services. A positive trade balance indicates a country's strong export position, which is usually a positive factor for the economy.

As for the pound, market participants' attention will be focused on the UK this morning, where important macroeconomic data will be released. In particular, the Halifax housing price index is expected to be released. This indicator is traditionally considered a measure of consumer confidence and the broader state of the economy, so any deviation from forecasts can have a significant impact on the dynamics of the British pound.

The speech of the Governor of the Bank of England, Andrew Bailey, also acquires special significance. Given the current economic environment and inflationary risks, market participants will carefully analyze every word of the central bank governor.

If the data meet economists' expectations, it is better to act based on a Mean Reversion strategy. If the data is significantly above or below economists' expectations, the Momentum strategy is preferable.

Momentum Strategy (Breakout):

For the EUR/USD Pair

• Buy on a breakout at 1.1745 could lead to an increase in the euro to around 1.1762 and 1.1800;
• Sell on a breakout at 1.1725 could lead to a decline in the euro to around 1.1700 and 1.1675;

For the GBP/USD Pair

• Buy on a breakout at 1.3580 could lead to an increase in the pound to around 1.3615 and 1.3645;
• Sell on a breakout at 1.3547 could lead to a decline in the pound to around 1.3514 and 1.3480;

For the USD/JPY Pair

• Buy on a breakout at 157.05 could lead to an increase in the dollar to around 157.40 and 157.69;
• Sell on a breakout at 156.73 could lead to a sell-off of the dollar to around 156.33 and 155.96;

Mean Reversion Strategy (Return):

For the EUR/USD Pair

• Look for short positions after a failed breakout above 1.1745 on a return below that level;
• Look for long positions after a failed breakout below 1.1722 on a return to that level;

For the GBP/USD Pair

• Look for shorts after a failed breakout above 1.3580 on a return below that level;
• Look for longs after a failed breakout below 1.3542 on a return to that level;

For the AUD/USD Pair

• Look for shorts after a failed breakout above 0.7235 on a return below that level;
• Look for longs after a failed breakout below 0.7202 on a return to that level;

For the USD/CAD Pair

• Look for shorts after a failed breakout above 1.3662 on a return below that level;
• Look for longs after a failed breakout below 1.3647 on a return to that level;