Demand for the US dollar has sharply decreased, while the euro, the pound, and other risk assets have gained weight following the latest statements on the Middle East.

Despite this occurring numerous times before, traders continue to react to it. The euro and the pound demonstrated strong growth, while the US dollar weakened. This development followed a statement by US President Donald Trump, who, despite initial intentions to undertake a large-scale attack on Iran, decided to postpone it. The reason for this decision was appeals from allies in the Persian Gulf countries asking for time to continue peace negotiations. The market reacted to this news with noticeable activity. The anxiety caused by a potential new military escalation began to subside, allowing traders to reassess their positions. The strengthening of risk assets may be related to the fact that uncertainty in geopolitics reduces the appeal of the dollar as a safe haven for capital.

Today, the first half of the day is expected to be relatively calm for macroeconomic indicators. Attention will focus on the release of data on the Eurozone's external trade balance. This indicator, which reflects the difference between exports and imports of goods and services, traditionally attracts the attention of traders and analysts, as it allows an assessment of the region's trading activity and competitiveness in the global market. It is expected that a decrease or slowdown in the growth of the surplus could exert some pressure on the euro, while a confident increase in the trade balance could support the single European currency.

However, even this data is likely to remain overshadowed by the main event of the day – the second day of the G7 summit. It is here that, as expected, the leaders of the world's major economies will discuss the issues, and the final communique will be published. The document typically contains key statements and agreements on a wide range of global issues, including economic policy, trade relations, security, and climate change. But traders will closely monitor the decisions made regarding the Strait of Hormuz.

As for the pound, the first half of the day in financial markets is expected to be tense, as traders' attention will be on key UK indicators. In particular, data on the unemployment rate, changes in average earnings, and the number of new unemployment claims will be published. These metrics are among the most sensitive to the state of the British economy, and their dynamics can significantly influence the national currency's exchange rate. Weak indicators in this data, such as rising unemployment or stagnating average monthly wages, are expected to lead to a quick resumption of pressure on the GBP/USD pair.

On the other hand, if the published data turns out to be better than forecasts – for example, a decrease in the unemployment rate, growth in real wages, or a reduction in the number of benefit claims – this could be a positive signal for the British pound. In such a case, the GBP/USD pair will likely show an upward movement, continuing yesterday's bullish momentum.

If the data matches economists' expectations, it is better to act based on the Mean Reversion strategy. If the data is significantly above or below economists' expectations, it is best to use the Momentum strategy.

Momentum Strategy (on Breakout):

For the EURUSD pair

Long positions on a breakthrough of level 1.1659 may lead to the euro rising to the area of 1.1678 and 1.1698;

Short positions on a breakthrough of level 1.1630 may lead to the euro falling to the area of 1.1609 and 1.1589;

For the GBPUSD pair

Longs on a breakthrough of level 1.3435 may lead to the pound rising to the area of 1.3473 and 1.3505;

Shorts on a breakthrough of level 1.3383 may lead to the pound falling to the area of 1.3344 and 1.3302;

For the USDJPY pair

Longs on a breakthrough of level 159.15 may lead to the dollar rising to the area of 159.40 and 159.65;

Shorts on a breakthrough of level 158.85 may lead to the dollar being sold off to the area of 158.55 and 158.25;

Mean Reversion Strategy (on Return):

For the EURUSD pair

Shorts will be sought after a failed breakout beyond 1.1655 on a return below this level;

Longs will be sought after a failed breakout beyond 1.1630 on a return to this level;

For the GBPUSD pair

Shorts will be sought after a failed breakout beyond 1.3430 on a return below this level;

Longs will be sought after a failed breakout beyond 1.3389 on a return to this level;

For the AUDUSD pair

Shorts will be sought after a failed breakout beyond 0.7147 on a return below this level;

Longs will be sought after a failed breakout beyond 0.7120 on a return to this level;

For the USDCAD pair

Shorts will be sought after a failed breakout beyond 1.3756 on a return below this level;

Longs will be sought after a failed breakout beyond 1.3738 on a return to this level;