It seems that interest in buying the U.S. dollar has slightly diminished at the end of the week, but this does not cancel out the sustained demand for it.

The dollar reacted only with a modest increase yesterday to the news that the Federal Reserve's preferred inflation measure came in exactly in line with expectations. As reported, the core PCE price index rose by 0.4 percent month-on-month in May, accelerating to 4.1 percent year-on-year. This figure was slightly above forecasts, suggesting ongoing inflationary pressure despite the central bank's efforts to contain it.

Let me remind you that the inflation metrics tracked by the Fed play a key role in shaping monetary policy. The acceleration of the core PCE figure, which excludes volatile food and energy prices, to 3.4 percent year-on-year raises concerns that inflation may be more persistent than previously thought.

Despite these inflation signals, markets seem to be reluctant to make sharp moves for now. Perhaps traders are awaiting new signals from the Fed. At the same time, the GDP data for the first quarter painted a more encouraging picture. The U.S. economy grew by 2.1 percent, noticeably stronger than initially expected. This figure suggests resilience in business activity and consumer demand, which may counter inflationary concerns.

Today, there are no important statistical data releases for the Eurozone and the UK in the first half of the day, leading to a period of relative calm in the foreign exchange market. In the absence of significant economic releases, all attention from investors and analysts will be focused on the speech from Bundesbank President Joachim Nagel. The comments from the head of the German central bank are often viewed as indicators of potential future steps by the European Central Bank, given Germany's weight in the Eurozone economy. Any hints of changes in rhetoric regarding inflation, interest rates, or economic growth prospects could significantly influence euro quotes.

As I mentioned above, there is also no statistical data from the UK today. This creates a sort of information vacuum for the British currency. The lack of new data or potentially negative statements may allow the already started upward correction of GBP/USD to gain additional momentum by the end of the week. However, it is important to remember that this upward correction may prove temporary. The long-term prospects for the pound will still depend on fundamental and domestic political factors.

If the data aligns with economists' expectations, it's best to act based on the Mean Reversion strategy. If the data is significantly higher or lower than economists' expectations, the Momentum strategy will be most appropriate.

Momentum Strategy (Breakout):

For the EUR/USD Pair

• Buy on a breakout at 1.1387, which could lead to a rise in the euro to the range of 1.1411 and 1.1436;
• Sell on a breakout at 1.1356, which could lead to a decline in the euro to the range of 1.1327 and 1.1288;

For the GBP/USD Pair

• Buy on a breakout at 1.3216, which could lead to an increase in the pound to the range of 1.3244 and 1.3270;
• Sell on a breakout at 1.3175, which could lead to a decline in the pound to the range of 1.3140 and 1.3097;

For the USD/JPY Pair

• Buy on a breakout at 161.85, which could lead to an increase in the dollar to the range of 162.04 and 162.24;
• Sell on a breakout at 161.56, which could lead to a decline in the dollar to the range of 161.33 and 161.10;

Mean Reversion Strategy (Return):

For the EUR/USD Pair

• Look for short positions after a failed breakout above 1.1388 on a return below this level;
• Look for long positions after a failed breakout below 1.1352 on a return to this level;

For the GBP/USD Pair

• Look for shorts after a failed breakout above 1.3210 on a return below this level;
• Look for longs after a failed breakout below 1.3175 on a return to this level;

For the AUD/USD Pair

• Look for shorts after a failed breakout above 0.6915 on a return below this level;
• Look for longs after a failed breakout below 0.6882 on a return to this level;

For the USD/CAD Pair

• Look for shorts after a failed breakout above 1.4209 on a return below this level;
• Look for longs after a failed breakout below 1.4187 on a return to this level;