USD down, metals weak

Frank Walbaum FX Strategies.Asia

Important news this week

Wed, 08th, 04:00 CET NZ RBNZ interest rate decision.
Wed, 08th, 20:00 CET US FOMC Meeting Minutes.
Fri, 10th, 14:30 CET CA Unemployment Claims.

Sterling takes the lead as markets await FOMC Minutes

The US dollar is trading slightly weaker, allowing several major currencies to recover modestly. The British Pound continues to outperform, with GBPUSD testing the 50-day moving average on the daily chart. A decisive break above this technical resistance could attract additional buying interest and strengthen Sterling further against the US dollar. With little economic data scheduled before tomorrow's FOMC meeting minutes, markets are likely to remain technically driven in the short term.
Precious metals are correcting after failing to sustain their recent move above resistance. The pullback appears to be driven more by profit-taking than a change in the broader outlook, while traders continue to monitor the US dollar for the next directional move. Equity markets are also approaching short-term resistance after their recent recovery, but the underlying trend remains constructive as long as key support levels hold. Lower bond yields and expectations that the Fed is unlikely to tighten policy further continue to support equity valuations.

Market talk

Crypto markets are beginning to show signs of fatigue. Bitcoin is trading near recent highs and appears increasingly toppish, while Ethereum is testing its 50-day moving average resistance on the daily chart. A rejection at current levels could trigger a broader consolidation across digital assets. With the FOMC meeting minutes due tomorrow, investors are expected to remain cautious. Unless the minutes reveal a significant shift in the Fed's outlook, market reactions may remain limited, leaving technical levels and US dollar direction as the primary drivers across FX, equities, metals, and crypto.

Tendencies in the markets

Equities positive, USD weak, BTC at resistance, oil rising, Silver sideways, Gold sideways.

Author

Frank Walbaum

FX Strategies.Asia

Frank has been working in the TV business for several years. Acquiring his skills in Germany’s biggest broadcasting station, he then chose to work and live in Asia, which was in 2007.

GBP/USD gains as easing Fed hike bets weigh on US Dollar

GBP/USD continues its winning streak for the ninth consecutive day, trading around 1.3390 during the Asian hours on Tuesday. The currency pair rises as the US Dollar faces headwinds as market participants scale back expectations for Federal Reserve rate hikes this month and in September.

EUR/USD eases toward 1.1400 as Hormuz risks support USD

EUR/USD is easing toward 1.1400 in European trading on Tuesday, facing rejection at the 1.1450 level. The pair loses ground amid a modest recovery in the safe-haven US Dollar, as renewed tensions in the Strait of Hormuz and Asian tech sell-off fuel risk aversion.

Gold sticks to losses as inflation fears lift US bond yields and USD amid Hormuz risks

Gold maintains its offered tone heading into the European session, albeit it holds above the $4,100 mark. Crude oil prices edge higher amid renewed tensions in the Strait of Hormuz, reviving inflationary concerns. This, in turn, triggers a fresh leg up in US Treasury bond yields, offering some support to the US Dollar, and weighing on the non-yielding yellow metal for the second straight day.

Bitcoin loses steam around $63,000 – DeFi tokens rally

Bitcoin sustains above $63,000 at press time on Tuesday, upholding a streak of six consecutive days of gains despite Strategy selling 3,588 BTC on Monday. The broader crypto market sentiment holds while DeFi tokens such as DeXe and LayerZero emerge as top gainers over the last 24 hours.

Bye, forward guidance: How to trade when central banks choose silence

Central banks have spent years telling markets what might come next. Now, traders face the possibility that they say a lot less. From the Federal Reserve to the European Central Bank and the Bank of England, policymakers are pushing back against forward guidance, arguing that the current world demands more flexibility.