The euro, pound, and other risk assets continued to rise against the U.S. dollar.

The dollar reacted to U.S. President Donald Trump's statements that the war with Iran is over and that he no longer plans to resume military operations, hoping to reach a peace agreement in the coming days. This statement, made amid heightened tensions in the Middle East, served as an unexpected signal for de-escalation, which the markets received optimistically.

Traders, who had previously been concerned about a further escalation of the conflict and its negative implications for the global economy following unsuccessful initial negotiations, breathed a sigh of relief. Immediately after this, the euro, pound, and other currencies strengthened against the U.S. dollar. However, despite the initial positive momentum, it is essential to caution against excessive enthusiasm. Trump's statements are often more rhetorical, and actual steps towards achieving peace may prove much more complex.

Today, the first half of the day will be marked by a series of important economic events that are likely to impact European financial markets. Special attention will be given to reports from the Eurozone, including the report on changes in industrial production. This indicator is a key measure of the manufacturing sector's health and can provide insights into its recent dynamics.

Additionally, other significant data will be released, including Italy's consumer price index. This information will help assess inflation in one of the largest economies of the Eurozone. Inflation data is critical for central banks, as it directly affects decisions on interest rates and monetary policy.

A key event of the day will undoubtedly be the speech by the President of the European Central Bank, Christine Lagarde. Statements from the central bank chief may shed light on the central bank's future steps regarding interest rates and price stability.

As for the British pound, there is no significant report today, so attention will be directed towards another speech by Bank of England Governor Andrew Bailey, who did not address monetary policy yesterday. This may indicate that today's comments will be more detailed and could provide insights into the central bank's future intentions. Markets are closely watching for any hints of potential changes in interest rates, as these directly affect borrowing costs and inflation.

If the data aligns with economists' expectations, it is advisable to act based on the Mean Reversion strategy. If the data comes in significantly higher or lower than economists' forecasts, the Momentum strategy may be more appropriate.

Momentum Strategy (Breakout):

For the EUR/USD pair

Buy on a breakout of 1.1800, which may lead to an increase in the euro to around 1.1835 and 1.1866;

Sell on a breakout of 1.1780, which may cause the euro to fall to around 1.1755 and 1.1722;

For the GBP/USD pair

Buy on a breakout of 1.3583, targeting a rise in the pound to around 1.3607 and 1.3632;

Sell on a breakout of 1.3550, targeting a decline in the pound to around 1.3515 and 1.3480;

For the USD/JPY pair

Buy on a breakout of 159.13, which may lead to an increase in the dollar to around 159.36 and 159.60;

Sell on a breakout of 158.85, potentially leading to a drop in the dollar to around 158.57 and 158.28;

Mean Reversion Strategy (Return):

For the EUR/USD pair

Look for short positions after a failed breakout beyond 1.1801 on a return below this level;

Look for long positions after a failed breakout beyond 1.1775 on a return to this level;

For the GBP/USD pair

Look for shorts after a failed breakout beyond 1.3581 on a return below this level;

Look for longs after a failed breakout beyond 1.3551 on a return to this level;

For the AUD/USD pair

Look for shorts after a failed breakout beyond 0.7143 on a return below this level;

Look for longs after a failed breakout beyond 0.7119 on a return to this level;

For the USD/CAD pair

Look for shorts after a failed breakout beyond 1.3785 on a return below this level;

Look for longs after a failed breakout beyond 1.3759 on a return to this level;