The recent Michigan survey numbers came in weaker than expected, causing a bit of disappointment in the market. Despite this, the US dollar has managed to hold steady and is currently trading near its highs against the Euro and the British Pound. It seems that the political climate leading up to the election is starting to overshadow the impact of economic data such as the Michigan survey.
For supporters of President Trump, the situation may seem dire given the recent data, while Biden supporters may feel more optimistic. The EURUSD pair is currently trading just below its recent low at 1.06668, indicating that the dollar is still holding strong. The GBPUSD pair, on the other hand, has dropped below its 200-bar moving average on the 4-hour chart at 1.2668, suggesting a bearish bias. The next downside target for the pair is around 1.26455, which is the 38.2% retracement level from the April low.
Despite the mixed performance against the Euro and the Pound, the US dollar remains near its highs against the New Zealand Dollar, Australian Dollar, and Canadian Dollar. On the other hand, the dollar is trading closer to its lows against the Japanese Yen and the Swiss Franc, as investors are pouring funds into these safe-haven currencies. The Bank of Japan recently announced a delay in bond selling until July, which may have contributed to the weakness in the Japanese Yen.
Following the BOJ’s decision, the USDJPY pair initially moved higher (indicating a weaker Yen), but has since retraced the entire gain. This suggests that market participants are still uncertain about the direction of the currency pair. Overall, the US dollar seems to be holding its ground despite the disappointing economic data, as investors weigh political factors and global market trends in their trading decisions.