The versatile fundamental statistics of the US economy is preventing the US dollar from strengthening against the euro and the pound on Friday. However, the short-term upward potential is still maintained.
According to the Chicago Business Barometer reported by the Fed-Chicago, business conditions rose from 59.4 in May to 65.7 in June. This boosted the dollar.
Meanwhile, data on US consumer sentiment showed a worsening situation which limited the demand for the US dollar.
According to reports of the University of Michigan, consumer sentiment in the US for June was at 95.1 points versus 97.1 points in May. Economists expected that the index would be at 94.4 for June. In comparison with the same period of the previous year, the index grew by 1.7%.
For today, the attention of traders will be focused on the unemployment rate in the euro area and the production data from the ISM Manufacturing Index in the US which is expected to grow.
The technical picture for the EURUSD pair suggests potential for a continued downward correction with a lower limit of 1.1385 with the first intermediate level of resistance in the range of 1.1425.
The Australian dollar and other commodity currencies also fell today against the US dollar despite activity growth in data China's manufacturing sector.
According to the report of Caixin Media Co.and Markit, the final Purchasing Manager's Index for China's manufacturing sector in June reached 50.4 points compared to 49.6 points in May. It is to be noted that values above 50 indicate an increase in activity.
The pressure on the Australian dollar today may remain before the Reserve Bank of Australia meeting. The event may increase the risk for the currency. The regulator will most likely keep interest rates unchanged as well as leave the same tone with no signals of monetary tightening or credit policy adjustments.
As for the technical picture of the AUDUSD pair, the downward correction may be limited to the support of 0.7650 as big players gradually return to the market. This will further strengthen the Australian dollar to the monthly high of 0.7710 to 0.7755.
