The dollar continues to strengthen in the first trading days of 2026, and it is precisely the U.S. military actions in Venezuela that are the main reason for the rise.

Traders concerned about geopolitical instability and the potential spread of the conflict rushed into safe havens traditionally associated with the dollar. This decision, driven by a desire to avoid uncertainty, has put pressure on emerging-market currencies, especially those whose economies depend heavily on commodity exports.

There is no economic data for the eurozone in the first half of today, so do not be surprised if the euro continues to lose against the dollar. In the absence of economic releases that determine FX market dynamics, traders' attention focuses on external factors. Current volatility and uncertainty, exacerbated by geopolitical risks, create a favorable setting for the dollar to strengthen as a safe-haven asset.

As for the pound, in the first half of the day, UK figures are expected for approved mortgage applications, net consumer lending, and the change in the M4 money aggregate. Together, these indicators will give a picture of the health of the country's financial system and consumer sentiment. An increase in approved mortgage applications generally indicates a pick-up in the housing market and confidence about the future. In turn, growth in net consumer lending can signal rising consumer spending, which in the short term positively affects the economy. Traders will scrutinize today's figures to assess the outlook for the UK economy and possible Bank of England actions.

If the data match economists' expectations, it is better to act using a Mean Reversion strategy. If the data comes in much higher or lower than expected, it is best to use a Momentum strategy.

Momentum strategy (breakout):

For EURUSD

• Buying on a breakout of 1.1699 may push the euro toward 1.1724 and 1.1754;
• Selling on a breakout of 1.1673 may push the euro toward 1.1649 and 1.1619;

For GBPUSD

• Buying on a breakout of 1.3446 may push the pound toward 1.3475 and 1.3500;
• Selling on a breakout of 1.3411 may push the pound toward 1.3374 and 1.3341;

For USDJPY

• Buying on a breakout of 157.40 may push the dollar toward 157.72 and 157.96;
• Selling on a breakout of 157.05 may lead to dollar sell-offs toward 156.68 and 156.30;

Mean Reversion strategy (reversion):

For EURUSD

• Look for short positions after a failed breakout above 1.1720 on a return below that level;
• Look for long positions after a failed breakout above 1.1656 on a return to that level;

For GBPUSD

• Look for shorts after a failed breakout above 1.3452 on a return below that level;
• Look for longs after a failed breakout above 1.3405 on a return to that level;

For AUDUSD

• Look for shorts after a failed breakout above 0.6695 on a return below that level;
• Look for longs after a failed breakout above 0.6665 on a return to that level;

For USDCAD

• Look for shorts after a failed breakout above 1.3789 on a return below that level;
• Look for longs after a failed breakout above 1.3735 on a return to that level;