Slightly worse business activity data in the US prompted the highly-anticipated correction on dollar, as service activity reportedly stood at 54.9 points and composite business activity reached a level of 54.3 points. Although the indices showed very little increase if compared to the previous month's data, the modest growth is enough for market players to pull up the overbought dollar.
However, dollar remains significantly overbought, and the market will continue to seize any opportunity to further weaken the currency. The retail sales data in the eurozone due out today may serve this purpose, especially since the pace of its decline could show a slowdown from -3.8% to -3.7%.
EUR/USD rose slightly as the downward trend slowed around the level of 1.0680. If the quote continues to rise above the level of 1.0750, an upward cycle will form, ultimately leading to a retest of last week's local high. As for the downside scenario, a consolidation below the level of 1.0700 may increase the volume of short positions.
A rebound could be observed in GBP/USD, starting from the support level around 1.2350. Staying above the level of 1.2450 will lead to a further increase in the pair, while a return below the level of 1.2400 may lead to another attempt to break the support level at 1.2350.
