Yesterday's Federal Reserve decision has revived demand for the U.S. dollar.

Yesterday's decision by the Fed regarding interest rates sparked notable activity in the financial markets, leading to a swift increase in the value of the American dollar. Many market participants expected a more dovish stance from the central bank, but the Fed decided to maintain the key interest rate at 3.75%, leaving it unchanged. Additionally, the Federal Open Market Committee confirmed its previously stated forecast of only one interest rate cut during this year. This information is likely interpreted by the market as a signal to maintain a relatively tight monetary policy in the near term, which typically supports the strengthening of the national currency.

The market reacted immediately. The dollar index, which tracks the performance of the U.S. currency against a basket of major global currencies, rose sharply. This strengthened the dollar's position against the euro, Japanese yen, and British pound. Clearly, the forecast of one rate cut suggests that the Fed will act cautiously, maintaining a wait-and-see approach until it receives convincing evidence of sustainable inflation reduction to the target level of 2%.

Today promises to be another busy day for the financial community, as the results of the European Central Bank's key interest rate meeting are scheduled for the first half of the day. This event typically attracts significant attention from market participants, as it serves as a key indicator of the future direction of monetary policy in the Eurozone. It is highly likely that no significant changes in the current ECB policy will be expected, emphasizing its cautious approach to managing the region's economy.

Immediately following the announcement, there will be a press conference where ECB President Christine Lagarde will provide a more detailed rationale for the measures taken and comment on the current economic situation.

As for the pound, reports on changes in the number of initial jobless claims and the unemployment rate in the UK will be released in the first half of the day. These reports will allow for an assessment of the current state of the British labor market, which is an important indicator of the overall economic health of the country.

Simultaneously with the publication of this data, the financial world will be anticipating the BoE's decision on the key interest rate. Given the current economic context and the need to control inflation, it is clear that the BoE will likely keep interest rates unchanged. However, it is uncertain whether the market will want to buy the pound.

Momentum Strategy (for Breakout):

For the EUR/USD Pair:

• Long positions on a breakout at the level of 1.1490 may lead to a rise in the euro to the area of 1.1526 and 1.1566;
• Short positions on a breakout at the level of 1.1465 may lead to a drop in the euro to the area of 1.1440 and 1.1410;

For the GBP/USD Pair:

• Longs on a breakout at the level of 1.3285 may lead to a rise in the pound to the area of 1.3306 and 1.3338;
• Shorts on a breakout at the level of 1.3265 may lead to a drop in the pound to the area of 1.3240 and 1.3220;

For the USD/JPY Pair:

• Longs on a breakout at the level of 159.75 may lead to a rise of the dollar to the area of 159.95 and 160.21;
• Shorts on a breakout at the level of 159.50 may lead to a decline of the dollar to the area of 159.18 and 158.93;

Mean Reversion Strategy (for Rebound):

For the EUR/USD Pair:

• Shorts will be considered after a failed breakout above 1.1502 on a return below this level;
• Longs will be considered after a failed breakout below 1.1450 on a return to this level;

For the GBP/USD Pair:

• Shorts will be considered after a failed breakout above 1.3312 on a return below this level;
• Longs will be considered after a failed breakout below 1.3255 on a return to this level;

For the AUD/USD Pair:

• Shorts will be considered after a failed breakout above 0.7070 on a return below this level;
• Longs will be considered after a failed breakout below 0.7031 on a return to this level;

For the USD/CAD Pair:

• Shorts will be considered after a failed breakout above 1.3739 on a return below this level;
• Longs will be considered after a failed breakout below 1.3705 on a return to this level;