The dollar remained under pressure following the release of another series of weak fundamental data from the U.S.

Weak figures from the ISM manufacturing index intensified pressure on the U.S. dollar in the second half of the day. The index, which reflects business activity in the manufacturing sector, unexpectedly declined, signaling a slowdown in industry growth. This, in turn, sparked concerns regarding the overall prospects of the American economy. Investors, worried about potential growth slowdowns, began to offload dollar assets, which directly impacted the currency's exchange rate. Dollar sales also increased amid expectations that the Federal Reserve might continue its accommodative monetary policy.

Today, in the first half of the day, data on the Eurozone consumer price index, the core consumer price index, and the unemployment rate are due. These reports will be crucial for assessing the current state of the region's economy and, consequently, for determining the European Central Bank's next steps in monetary policy.

Particular attention will be given to the consumer price index, which is a key inflation indicator. Sustaining it around the European Central Bank's target level of 2.0% could prompt the central bank to maintain a wait-and-see stance regarding interest rates. Conversely, a significant slowdown in the CPI might signal the need for monetary easing to support economic growth.

The unemployment data will provide insight into the state of the labor market. A reduction in the unemployment rate may bolster consumer demand and increase inflationary pressure, while an increase could indicate a slowdown in economic growth.

Regarding the pound, a summary and transcript of the Bank of England's Monetary Policy Committee meeting, as well as the UK housing price index from Nationwide, are expected to be published in the first half of the day. A thorough analysis of the report from the policymakers' meeting will allow market participants to gauge how conservative the Bank of England's stance on rates is. The Nationwide housing price index serves as one indicator of the state of the UK housing market. An increase in the index may indicate strengthening of the economy and rising consumer confidence, while a decrease could signal potential issues within the economy and a decline in housing demand.

If the data aligns with economists' expectations, it is better to act based on the Mean Reversion strategy. If the data significantly exceed or fall short of economists' expectations, the Momentum strategy would be most appropriate.

Momentum Strategy (Breakout):

For the EUR/USD Pair

• Buying on a breakout above 1.1623 may lead to the euro rising to 1.1651 and 1.1678.
• Selling on a breakout below 1.1591 may lead to a decline in the euro to levels of 1.1558 and 1.1527.

For the GBP/USD Pair

• Buying on a breakout above 1.3229 may push the pound to 1.3250 and 1.3272.
• Selling on a breakout below 1.3203 may lead to a decline in the pound to levels of 1.3177 and 1.3150.

For the USD/JPY Pair

• Buying on a breakout above 155.75 may lead to the dollar rising to 156.12 and 156.55.
• Selling on a breakout below 155.40 may lead to a decline in the dollar to levels of 155.08 and 154.77.

Mean Reversion Strategy (Return):

For the EUR/USD Pair

• I will look for short positions after an unsuccessful breakout above 1.1617 on a return below this level.
• I will look for longs after an unsuccessful breakout below 1.1595 on a return to this level.

For the GBP/USD Pair

• I will look for shorts after an unsuccessful breakout above 1.3226 on a return below this level.
• I will look for longs after an unsuccessful breakout below 1.3199 on a return to this level.

For the AUD/USD Pair

• I will look for shorts after an unsuccessful breakout above 0.6564 on a return below this level.
• I will look for longs after an unsuccessful breakout below 0.6540 on a return to this level.

For the USD/CAD Pair

• I will look for shorts after an unsuccessful breakout above 1.4013 on a return below this level.
• I will look for longs after an unsuccessful breakout below 1.3989 on a return to this level.