The euro and the pound held their positions against the U.S. dollar, rebounding after news that U.S. producer prices in March fell sharply—just like the previous day's core inflation data.

The March U.S. Producer Price Index (PPI) data surprised traders and the Federal Reserve, as the figure declined significantly rather than increasing. This unexpected drop strengthened hopes that inflation in the U.S. will continue to decelerate, although such a scenario remains unlikely given Donald Trump's policies. Nonetheless, the current data allows the Federal Reserve to take a more dovish stance regarding interest rates. Traders interpreted the news as a signal to buy risk assets, putting additional pressure on the U.S. dollar.

If the disinflation trend continues, the Fed may reconsider its policy strategy, potentially leading to further dollar weakness and supporting gains in other currencies. However, it's important to remember that financial markets remain highly volatile—especially under Trump—and any new economic statements from the White House or the Fed could shift current projections.

Today, the euro may continue to rise, as the only scheduled fundamental event is the meeting of EU finance ministers. Without key economic indicators, traders will likely pay close attention to any statements and signals from EU representatives. Their tone, particularly regarding economic stimulus and inflation control plans, could significantly impact the euro's dynamics.

As for GBP/USD, with no UK macroeconomic data on the calendar, buyers of the pair maintain a favorable opportunity to retain dominance. However, a noticeable drop in volatility is likely early in the European session.

The Mean Reversion strategy is preferred if the data matches economists' expectations. The Momentum strategy is more appropriate if the data significantly exceeds or falls short of expectations.

Momentum Strategy (Breakout):

EUR/USD

Buying on a breakout above 1.1393 could lead to a rise toward 1.1467 and 1.1562.

Selling on a breakout below 1.1322 could lead to a decline toward 1.1253 and 1.1167.

GBP/USD

Buying on a breakout above 1.3139 could lead to a rise toward 1.3204 and 1.3262.

Selling on a breakout below 1.3084 could lead to a decline toward 1.3032 and 1.2986.

USD/JPY

Buying on a breakout above 143.29 could lead to a rise toward 143.77 and 144.17.

Selling on a breakout below 142.86 could trigger a decline toward 142.32 and 141.82.

Mean Reversion Strategy (Pullbacks):

EUR/USD

Look to sell after a failed breakout above 1.1425 with a return below that level.

Look to buy after a failed breakout below 1.1339 with a return to that level.

GBP/USD

Look to sell after a failed breakout above 1.3134 with a return below that level.

Look to buy after a failed breakout below 1.3083 with a return to that level.

AUD/USD

Look to sell after a failed breakout above 0.6319 with a return below that level.

Look to buy after a failed breakout below 0.6277 with a return to that level.

USD/CAD

Look to sell after a failed breakout above 1.3887 with a return below that level.

Look to buy after a failed breakout below 1.3838 with a return to that level.