The U.S. dollar continued to lose ground actively on Friday, and there was a certain reason for this.

A sharp decline in the University of Michigan consumer sentiment index led to a similar drop in the U.S. dollar against the euro. Traders interpreted this as a signal of a potential slowdown in U.S. economic growth, which, in turn, reduced the dollar's appeal as a safe asset. This was especially evident in the EUR/USD and GBP/USD pairs, where the euro and the pound strengthened by breaking key resistance levels. Immediately after the data was released, discussions arose regarding further monetary measures from the U.S. Federal Reserve. The market believes that amid deteriorating economic indicators, the Fed may continue to lower interest rates.

Today, no important fundamental data is expected from the Eurozone, with only the Sentix investor confidence index anticipated. However, even in the absence of significant economic releases, markets continue to move, forming short-term and medium-term trends. Although the Sentix indicator is not a decisive factor in the European Central Bank's decision-making, it does provide an assessment of investor sentiment and expectations for the region's economy. A low confidence level reflected in this indicator may signal potential weakness for the euro, especially if it is significantly below expectations. Conversely, a positive surprise from Sentix could provide some support for the euro, temporarily easing selling pressure.

Regarding the pound, there is also no scheduled statistical data today, so traders are likely to focus on the speech by Bank of England Deputy Governor for Monetary Policy Clare Lombardelli. Markets will closely monitor every word from Lombardelli, looking for hints on the future trajectory of the BoE's monetary policy. Her perspective on inflation will be particularly significant, especially given that inflation remains high despite measures taken. If the Deputy Governor expresses concerns about the persistence of inflationary pressures and indicates the need to maintain a strict policy, it will undoubtedly push the pound higher.

However, the market's reaction to Lombardelli's speech will depend not only on her tone but also on traders' overall sentiment and news from other regions of the world.

If the data aligns with economists' expectations, it is better to act based on the Mean Reversion strategy. If the data is significantly higher or lower than economists' expectations, the Momentum strategy should be utilized.

Momentum Strategy (Breakout):

For the EUR/USD Pair

• Buy on a breakout of 1.1571, which may lead to an increase in the euro to the levels of 1.1590 and 1.1610.
• Sell on a breakout of 1.1550, which may lead to a decline in the euro to the levels of 1.1530 and 1.1492.

For the GBP/USD Pair

• Buy on a breakout of 1.3165, which may lead to an increase in the pound to the levels of 1.3199 and 1.3216.
• Sell on a breakout of 1.3139, which may lead to a decline in the pound to the levels of 1.3098 and 1.3056.

For the USD/JPY Pair

• Buy on a breakout of 154.25, which may lead to an increase in the dollar to the levels of 154.70 and 155.00.
• Sell on a breakout of 153.80, which may lead to a decline in the dollar to the levels of 153.35 and 153.00.

Mean Reversion Strategy (Retracement):

For the EUR/USD Pair

• Look to sell after an unsuccessful breakout above 1.1575, on the retracement back below this level.
• Look to buy after an unsuccessful breakout below 1.1548, on the retracement back to this level.

For the GBP/USD Pair

• Look to sell after an unsuccessful breakout above 1.3174, on the retracement back below this level.
• Look to buy after an unsuccessful breakout below 1.3135, on the retracement back to this level.

For the AUD/USD Pair

• Look to sell after an unsuccessful breakout above 0.6538, on the retracement back below this level.
• Look to buy after an unsuccessful breakout below 0.6504, on the retracement back to this level.

For the USD/CAD Pair

• Look to sell after an unsuccessful breakout above 1.4042, on the retracement back below this level.
• Look to buy after an unsuccessful breakout below 1.4009, on the retracement back to this level.