The dollar significantly weakened against major world currencies, and there were several reasons for this.

Yesterday, several Federal Reserve representatives stated that the latest labor market report had a serious impact on them. As a reminder, Fed officials' statements are key signals for assessing the likelihood of future policy actions. The nearly simultaneous remarks made yesterday reflect growing concerns about the state of the labor market. While the U.S. labor market overall remains resilient, there are signs of a slowdown in job growth and an increase in jobless claims. If these trends persist, they could put pressure on consumer spending and overall economic growth.

A rate cut in September would be a significant step, signaling that the Fed is concerned about the economic outlook and is ready to take measures to stimulate growth.

Today's economic calendar is not eventful. The most interest is in data from Germany. In the first half of the day, fresh figures on industrial production and the trade balance will be released. Germany, as the locomotive of the European economy, has a strong impact on the euro exchange rate. Industrial production is a key indicator of economic health. An increase in output indicates rising demand, new orders, and, consequently, positive GDP dynamics. If strong data is released, the euro may strengthen as this would signal a healthy German economy and, indirectly, the eurozone as a whole.

The trade balance also plays an important role. A positive balance reflects the competitiveness of German goods on the global market and capital inflows into the country. This factor also supports the euro.

As for the pound, in the first half of the day, the Bank of England's decision on the key interest rate will be published, along with a speech by BoE Governor Andrew Bailey. The announcement of the interest rate decision, which will almost certainly be cut to 4.00%, is one of the day's most significant events. Any change will immediately impact pound volatility, and if the Fed adopts a more dovish stance, it could limit GBP/USD's upside potential. Particular attention will be paid to the BoE's accompanying statement, which will provide insight into the reasons behind the decision and the central bank's future monetary policy plans. Andrew Bailey's speech is also of primary importance. The BoE chief traditionally uses this platform to explain the central bank's position, assess the current economic situation, and provide forecasts.

If the data matches economists' expectations, it is better to follow a Mean Reversion strategy. If the data significantly exceeds or falls short of expectations, it's best to use a Momentum strategy.

Momentum Strategy (Breakout):

EUR/USD

Buying on a breakout above 1.1690 may lead to the euro rising toward 1.1720 and 1.1740;

Selling on a breakout below 1.1655 may lead to the euro falling toward 1.1615 and 1.1567.

GBP/USD

Buying on a breakout above 1.3381 may lead to the pound rising toward 1.3422 and 1.3448;

Selling on a breakout below 1.3350 may lead to the pound falling toward 1.3320 and 1.3187.

USD/JPY

Buying on a breakout above 147.59 may lead to the dollar rising toward 147.93 and 148.23;

Selling on a breakout below 147.32 may trigger a sell-off of the dollar toward 146.90 and 146.65.

Mean Reversion Strategy (Pullbacks):

EUR/USD

I will look for shorts after a failed breakout above 1.1682 and a return below this level;

I will look for longs after a failed breakout below 1.1645 and a return to this level.

GBP/USD

I will look for shorts after a failed breakout above 1.3382 and a return below this level;

I will look for longs after a failed breakout below 1.3341 and a return to this level.

AUD/USD

I will look for shorts after a failed breakout above 0.6526 and a return below this level;

I will look for longs after a failed breakout below 0.6494 and a return to this level.

USD/CAD

I will look for shorts after a failed breakout above 1.3756 and a return below this level;

I will look for longs after a failed breakout below 1.3722 and a return to this level.