Markets start to turn – Is the risk-on rally losing momentum?

Frank Walbaum

Important news this week

Tue, 18th, 08:00 CET UK Claimant Count Change.
Wed, 19th, 08:00 CET UK Consumer Price Index.
Wed, 19th, 20:00 CEt US FOMC Meeting Minutes.

Markets start to turn – Is the risk-on rally losing momentum?

Markets are showing early signs of a turn as equities begin to correct after their recent advance. The S&P 500 and Nasdaq are losing momentum, while the US Dollar could be preparing for a rebound from the 99.40 support zone on the DXY. A stronger Dollar would add further pressure to risk assets and could accelerate the current correction.
Oil prices are moving higher again, adding another variable for markets and inflation expectations. Gold and Silver are slightly lower, potentially reflecting the early Dollar recovery rather than a fundamental shift in metals demand. In FX, AUDUSD is testing the important 0.7100 resistance zone. A failure to break higher could lead to a deeper retracement, particularly if equity markets continue to weaken.

Market talk

Crypto remains particularly vulnerable. Bitcoin and the broader altcoin market are showing little upside momentum, and further weakness in the Nasdaq could quickly translate into additional selling pressure across digital assets. The key question now is whether the current equity weakness remains a normal retracement or develops into a broader risk-off move. The DXY reaction around 99.40 could provide an important early signal.

Tendencies in the markets

Equities correcting, USD stronger, BTC sideways, ETH weak, oil positive, metals sideways, JPY weak.

Author

Frank Walbaum

GBP/USD holds losses below 1.3550 after weak UK jobs data

GBP/USD holds losses below 1.3550 in European trading hours on Tuesday. The UK ILO Unemployment Rate held steady at 4.9% in the three months to June, against a forecast of 4.8%, while Employment Change arrived at 83K in the same period versus 147K previous. Weak UK labor data keep the British Pound under pressure, driving the pair lower.

EUR/USD stays below 1.1600 despite upbeat sentiment data

EUR/USD struggles to gain traction and trades below 1.1600 in the European session on Tuesday, even after the data from the Eurozone and Germany highlighted improving economic sentiment in August. The US Dollar (USD) benefits from the risk-averse market atmosphere as tensions in Middle East remain high, making it difficult for the pair to turn north.

Gold sticks to losses below $4,400 as USD recovers further from two-month low

Gold remains depressed below the $4,400 mark through the first half of the European session, snapping a two-day winning streak amid a broadly firmer US Dollar. Inflation risks stemming from higher oil prices back the case for at least one interest rate hike by the US Federal Reserve in 2026.

Ripple and Stellar remain under bearish pressure as corrective declines cap upside

Ripple and Stellar remain under pressure as broader market uncertainty and weak technical momentum weigh on both altcoins. XRP is hovering below the key $1 mark on Tuesday while XLM continues its corrective decline below $0.157. Meanwhile, mixed derivatives and on-chain signals indicate cautious sentiment, leaving both cryptocurrencies vulnerable to further downside.

Fiscal concerns and doubts on Fed independence send US yields to long-term highs

US Treasury yields keep rising across the curve this week, with the yield for the 30-year Treasury bond reaching its highest level since 2007, during the global financial crisis, at 5.33% so far on Monday. A mix of concerns about the ballooning US fiscal deficit and growing doubts about the Federal Reserve’s Independence are increasing pressure on US Government Bonds.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.