The European common currency lowered its gains this week against the U.S. dollar after retreating today from 12-week high where it did a downside correction. However, the euro will witness its first monthly advance this month following seven months of decline.
On the other hand, the U.S. dollar strengthened against a basket of major currencies, as depicted by the dollar index which rebounded to 81.80 from the day's low of 81.47 ahead of the release of important growth and manufacturing data from the U.S.
Later on today, annualized GDP for the second quarter is due with expectations to dip down to 2.6% from 2.7%, while Chicago PMI is predicted to retreat to 56.0 in July from 59.1 in June.
Thus, the dollar remains under pressure, especially after announcements by Federal Reserve Bank of St. Louis President James Bullard, who mentioned that the U.S. economy is heading towards Japanese-style deflation, arousing worries after the latest Fed notes referred that the economy will witness a slowdown in growth.
Concerning the euro-dollar pair, it fell after hitting resistance at 1.3100 yesterday, while today the breach of 1.3050 levels pushed the pair to a low of 1.2978, while it is currently trading 1.3014.
Earlier today, the pair touched a high of 1.3093 while it is predicted to move between support and resistance at 1.2950 and 1.3065 respectively.
Moving to the sterling-dollar pair, it did a downside correction on the daily charts as the pair has been trading in an overbought area. The Sterling fell from 5-month high against the greenback after advancing for six consecutive sessions in the absence of economic fundamentals from the United Kingdom.
Now, the pair is trading at 1.5581 after recording a high of 1.5655 and a low of 1.5549, whereas it is expected to move between support at 1.5610 and resistance at 1.5670 for the rest of the day.
With regard tothe dollar-yen pair, it is moving south for the third day on the daily basis on concerns U.S. recovery is losing momentum. The Japanese yen spiked today to the highest level since December against the greenback, where it currently trading at 86.49, but the pair halted its fall after hitting the support at 86.23. So far, the pair reported a high of 86.97 and a low of 86.13, whereas support is seen at 85.75 while resistance is at 87.00.