The euro and the pound experienced a decline after Trump threatened to initiate a trade war with the EU, despite disappointing economic data from the U.S.

Poor figures for new home sales in the U.S. heightened concerns about a potential economic recession. As a result, traders began to revise their forecasts for the Federal Reserve's monetary policy, expecting a more dovish stance in the future. This shift exerted additional short-term pressure on the dollar.

Conversely, the euro found support due to the dollar's weakness and some positive developments in eurozone economic indicators. Although inflation in the eurozone remains high, there are signs that it is slowing, which could provide the European Central Bank with more flexibility in its monetary policy.

However, Trump's statement indicating he was prepared to impose a 25% tariff on all EU imports alarmed the markets, especially since the initial discussions had been focused solely on automobiles. This announcement led to a sharp reversal in the EUR/USD pair, resulting in a significant decline.

Today, the euro may continue to face pressure as weak data is anticipated regarding the eurozone's M3 money supply growth and private sector lending. The European Central Bank will also release its monetary policy meeting report, which could indicate a slowdown in economic growth within the region, potentially diminishing the euro's appeal. Special attention will be given to the ECB's position on any further monetary policy easing.

Overall, the outlook for the euro remains uncertain, and much will depend on incoming economic data, comments from ECB officials, and actions taken by Trump concerning tariffs and possible EU countermeasures.

If the data aligns with economists' expectations, it is advisable to follow the Mean Reversion strategy. Conversely, if the data considerably exceeds or falls short of expectations, the Momentum strategy would be more appropriate.

Momentum Strategy (on breakout):

EUR/USD

Buying above 1.0478 may push the euro up to 1.0525 and 1.0560.

Selling below 1.0455 may drive the euro down to 1.0430 and 1.0405.

GBP/USD

Buying above 1.2675 may push the pound up to 1.2710 and 1.2730.

Selling below 1.2645 may drive the pound down to 1.2605 and 1.2560.

USD/JPY

Buying above 149.30 may push the dollar up to 149.60 and 149.90.

Selling below 149.00 may trigger a decline to 148.70 and 148.50.

Mean Reversion Strategy (on pullbacks):

EUR/USD

Look for sell opportunities after a failed breakout above 1.0501, when price returns below this level.

Look for buy opportunities after a failed breakout below 1.0461, when price returns above this level.

GBP/USD

Look for sell opportunities after a failed breakout above 1.2689, when price returns below this level.

Look for buy opportunities after a failed breakout below 1.2648, when price returns above this level.

AUD/USD

Look for sell opportunities after a failed breakout above 0.6318, when price returns below this level.

Look for buy opportunities after a failed breakout below 0.6295, when price returns above this level.

USD/CAD

Look for sell opportunities after a failed breakout above 1.4361, when price returns below this level.

Look for buy opportunities after a failed breakout below 1.4328, when price returns above this level.