The European common currency and royal pound dropped after the release of weak industrial and manufacturing data in Germany and Untied Kingdom.
German industrial production fell 0.6% in June from the revised 2.9% a month earlier, while UK industrial production slipped 0.5% in June from 0.7% andmanufacturing production came lower than estimates.
Concerning the euro-dollar pair, it reversed down to 1.3161 after hitting a high of 1.3203 where it found strong resistance at this level, where it recorded a low of 1.3155. For the rest of the day, the pair is expected to move between support and resistance at 1.2950 and 1.3065 respectively.
The pair is doing downside correction after the euro has risen to the highest level in more than three months against the greenback as well as achieving its first monthly advance in July since December. It is natural to face some downside pressure as some investors lock in gains and momentum indicators entered overbought areas. The German report pulled the pair to the downsideoutweighing the buoyant announcements by Trichet yesterday.
Moving to the sterling-dollar pair, it is showing decline on the daily basis but facing upside pressure from the 4-hour and 1-hour timeframes. The pair is also predicted to stop its rally after the sterling has surged to above 5-month high against the U.S. dollar. The downside correction is supported by weak industrial and manufacturing data and ease in major sector's growth as seen by PMI manufacturing and services earlier this week.
Currently, the pair is trading at 1.3716 after recording a high of 1.5917 and a low of 1.5838, while it is expected to move between support at 1.5610 and resistance at 1.5670 for the rest of the day.
With regard to the dollar-yen pair, it is showing slight incline ahead of the release of U.S. job report which will reflect the strength of the U.S. labor market, especially after the unexpected rise in initial jobless claims yesterday.
So far, the pair is trading at 85.89, reporting a high of 86.17 and a low of 85.72, whereas support is seen at 85.75 while resistance is at 87.00.