Volatility has decreased even further, forcing traders to stay out of the market. Meanwhile, the euro continued its correction against the dollar, while the pound holds its positions.

Against the backdrop of a lack of important fundamental data from the US and statements from Federal Reserve representatives, traders preferred to take a wait-and-see position. The report on existing home sales in the US passed unnoticed. The data showed a 1.7% decrease in July, although the market still maintained a 2.4% increase since the beginning of the year. Sales in the secondary market reflect activity in the interest-rate-sensitive segment and indirectly indicate consumer conditions; however, this indicator is itself in the second tier. Since the data closely matched economists' expectations, market volatility remained low. For the euro and the pound, such a neutral backdrop meant there was little significant pressure. With the data falling within expectations, the dollar had no new reasons for movement, and both European currencies remained predominantly aligned with external influences.

Today, in the first half of the day, final data on the consumer price index from Italy and Germany will attract attention regarding the single currency. The consumer price index reflects the pace of inflation. It directly impacts expectations regarding European Central Bank policy, as the more sustained the price pressure, the more compelling the arguments for a tight central bank stance. However, we are discussing revised values, so the key question is whether they match the previously published preliminary estimates. If the data confirm the preliminary figures, significant changes in the market balance of power are unlikely. In the absence of surprises, the euro will not gain new impetus, and the EUR/USD pair will likely continue to move in line with the external backdrop, with a focus on dollar behavior. Only unexpected revisions to inflation relative to preliminary values can significantly move the euro during the European session.

Regarding the pound, today's lack of UK reports in the first half of the day again leaves it without its own benchmarks. Without fresh figures for inflation, employment, or business activity, traders have no basis for action, and these indicators usually govern expectations for the Bank of England's rate and direct the movement of the British currency. When there are no such data, the pound becomes dependent on external forces and is primarily determined by sentiments surrounding the dollar.

However, in a calm environment, pound buyers still have every chance to continue the bullish market. The absence of internal catalysts makes it easier for the GBP/USD pair to maintain its upward trend and build on recent gains.

If the data matches economists' expectations, it is better to act based on the Mean Reversion strategy. If the data turns out to be much higher or lower than economists' expectations, it is best to use the Momentum strategy.

Momentum Strategy (for breakouts):

For the EUR/USD pair

Buying on a breakout of 1.1549 may lead to a rise in the euro to around 1.1579 and 1.1624;

Selling on a breakout of 1.1519 may lead to a decline in the euro to around 1.1502 and 1.1482;

For the GBP/USD pair

Buying on a breakout of 1.3527 may lead to a rise in the pound to around 1.3554 and 1.3581;

Selling on a breakout of 1.3492 may lead to a decline in the pound to around 1.3465 and 1.3435;

For the USD/JPY pair

Buying on a breakout of 159.60 may lead to a rise in the dollar to around 159.83 and 160.02;

Selling on a breakout of 159.39 may lead to a sell-off of the dollar to around 159.13 and 158.83;

Mean Reversion Strategy (for returns):

For the EUR/USD pair

Sell positions will be sought following an unsuccessful attempt to break above 1.1550 when returning below this level;

Buy positions will be sought following an unsuccessful attempt to break below 1.1528 when returning to this level;

For the GBP/USD pair

Sell positions will be sought following an unsuccessful attempt to break above 1.3517 when returning below this level;

Buy positions will be sought following an unsuccessful attempt to break below 1.3486 when returning to this level;

For the AUD/USD pair

Sell positions will be sought following an unsuccessful attempt to break above 0.7075 when returning below this level;

Buy positions will be sought following an unsuccessful attempt to break below 0.7045 when returning to this level;

For the USD/CAD pair

Sell positions will be sought following an unsuccessful attempt to break above 1.3940 when returning below this level;

Buy positions will be sought following an unsuccessful attempt to break below 1.3914 when returning to this level;