Forex Analysis & Reviews: 07.08.2025

The euro and the Canadian dollar were traded today using the Mean Reversion strategy, while the Australian dollar and Japanese yen were suitable for the Momentum strategy.

Following the release of weak German industrial production data, which pointed to continued slowdown in the eurozone’s largest economy, along with mixed trade balance figures, the euro faced pressure in the first half of the day. Despite this, the euro showed some resilience, likely supported by expectations of dovish signals from Federal Reserve officials.

In the second half of the day, demand for EUR/USD may increase. This could be driven by weaker-than-expected U.S. jobless claims data and a dovish tone from FOMC member Raphael Bostic. U.S. consumer credit data will also be closely monitored by traders. However, given the current uncertainty in the global economy, any positive signals from the U.S. could strengthen the dollar and add pressure on the euro. If jobless claims come in below expectations, it would indicate continued labor market stability. Bostic’s speech—given his reputation for conservative views—could also influence EUR/USD dynamics. If he expresses confidence in the U.S. economic recovery and signals a wait-and-see approach, the dollar may receive additional support.

Consumer credit figures from the U.S. should not be overlooked. A rise in this indicator may signal growing consumer demand, which would also be a positive sign for the U.S. economy and, consequently, for the dollar.

If the data proves strong, I will rely on the Momentum strategy. If the market shows no reaction to the data, I will continue using the Mean Reversion strategy.

Momentum Strategy (breakout trades) for the second half of the day:

EUR/USD

• Buying on a breakout above 1.1680 may lead to a rise toward 1.1720 and 1.1750;
• Selling on a breakout below 1.1655 may lead to a decline toward 1.1610 and 1.1570;

GBP/USD

• Buying on a breakout above 1.3380 may lead to a rise toward 1.3420 and 1.3444;
• Selling on a breakout below 1.3355 may lead to a decline toward 1.3320 and 1.3280;

USD/JPY

• Buying on a breakout above 147.60 may lead to a rise toward 147.95 and 148.30;
• Selling on a breakout below 147.20 may lead to a decline toward 146.80 and 146.60;

Mean Reversion Strategy (rebound trades) for the second half of the day:

EUR/USD

• I will look for short positions after a failed breakout above 1.1699 followed by a return below this level;
• I will look for long positions after a failed breakout below 1.1654 followed by a return to this level;

GBP/USD

• I will look for short positions after a failed breakout above 1.3389 followed by a return below this level;
• I will look for long positions after a failed breakout below 1.3355 followed by a return to this level;

AUD/USD

• I will look for short positions after a failed breakout above 0.6542 followed by a return below this level;
• I will look for long positions after a failed breakout below 0.6515 followed by a return to this level;

USD/CAD

• I will look for short positions after a failed breakout above 1.3743 followed by a return below this level;
• I will look for long positions after a failed breakout below 1.3720 followed by a return to this level.