The euro and the pound managed to withstand the pressure they faced before the Federal Reserve meeting and continued to rise immediately after.

It was announced that the Federal Open Market Committee (FOMC) decided to keep the key interest rate within the target range of 4.25% - 4.5% for the second consecutive meeting. This decision reflects the delicate balance the central bank must maintain. Keeping the rate unchanged allows the FOMC to assess the impact of previous cuts on the economy before making further decisions. Committee members expressed concerns about economic growth prospects, pointing to signs of weakness in some sectors and worries about inflation, which prevents them from further lowering rates for now.

As long as inflation remains above the 2% target, the FOMC must closely monitor price dynamics. The committee emphasized its commitment to bringing inflation back to the target level but noted that achieving this goal would take time.

Today, the euro's growth may continue, but this will require strong data on Germany's Producer Price Index and a firm stance from European Central Bank President Christine Lagarde. Investors are closely watching economic data from Germany, as it is a key indicator of the eurozone's economic health. Higher-than-expected Producer Price Index figures could strengthen the euro.

At the same time, attention is focused on Christine Lagarde's statements. If the ECB president speaks positively about inflation, given recent data indicating a decline in the eurozone, and hints at further rate cuts, this could trigger a wave of euro selling. Markets react sharply to any signs of changes in monetary policy direction, and dovish comments from Lagarde could be a catalyst for a significant decline in the European currency.

Additionally, the Bank of England meeting will take place today. Traders will be focused on the central bank's assessment of the current economic situation and inflation outlook. BoE Governor Andrew Bailey's press conference is particularly important, as his statements could shed light on the future course of monetary policy. Understanding how long the BoE intends to curb inflation and its next steps regarding interest rates is crucial.

Moreover, key labor market data from the UK, including unemployment rates and wage growth, will be released today. These figures will provide insight into the state of the British economy and could influence forecasts regarding the BoE's future actions. Strong data may lead to a more cautious approach to rate cuts, while weak figures could push the central bank toward a more accommodative stance.

If the data aligns with economists' expectations, the best approach is to trade based on the Mean Reversion strategy. However, the Momentum strategy is preferable if the data significantly exceeds or falls short of expectations.

Momentum Strategy (on breakout):

EUR/USD

Buying on a breakout above 1.0925 could lead to an increase toward 1.0955 and 1.0990.

Selling on a breakout below 1.0888 could result in a decline toward 1.0850 and 1.0827.

GBP/USD

Buying on a breakout above 1.2999 could push the pound toward 1.3028 and 1.3068.

Selling on a breakout below 1.2980 could drive the pound down to 1.2940 and 1.2910.

USD/JPY

Buying on a breakout above 148.45 could lead to an increase toward 148.90 and 149.30.

Selling on a breakout below 148.20 could trigger a decline to 147.85 and 147.50.

Mean Reversion Strategy (on pullbacks):

EUR/USD

Look for sell opportunities after a failed breakout above 1.0922, upon a return below this level.

Look for buy opportunities after a failed breakout below 1.0888, upon a return to this level.

GBP/USD

Look for sell opportunities after a failed breakout above 1.3018, upon a return below this level.

Look for buy opportunities after a failed breakout below 1.2982, upon a return to this level.

AUD/USD

Look for sell opportunities after a failed breakout above 0.6361, upon a return below this level.

Look for buy opportunities after a failed breakout below 0.6319, upon a return to this level.

USD/CAD

Look for sell opportunities after a failed breakout above 1.4340, upon a return below this level.

Look for buy opportunities after a failed breakout below 1.4314, upon a return to this level.