Forex Today: Dollar returns to the losing path

FXStreet Team FXStreet

Here is what you need to know on Tuesday, August 4:

The dollar extended Friday’s gains at the beginning of the day but finally gave up during US trading hours. The greenback appreciated without a clear reason beyond position adjustment at the beginning of the month.

The EUR/USD pair bounced from around 1.17, while GBP/USD found buyers around 1.30, clearly reflecting the limited interest for the dollar. All in one, it seems that the corrective advance of the American currency is already complete, and there are no reasons for it to extend its gains.

Equities surged, in detriment of safe-haven assets. Tech shares led the way higher within the American afternoon.

The pandemic remains in the eye of the storm. Somehow, it seems that the number of new cases in the US has stabilized, although Richmond Fed President Barking said that the coronavirus resurgence is dampening the pace of the US economic momentum and the path of the economy depends critically on the path of the virus. The Aussie got hit by the latest curfew in Victoria, as the government seems incapable of containing the latest outbreak.

Gold retained its gains, holding above $1,940 a troy ounce.

Cryptocurrency Market News: Ethereum on its way to regaining $400 while BNB hit a new high at $22.5

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EUR/USD weakens to near 1.1900 as traders eye US data

The EUR/USD pair loses ground to around 1.1905, snapping the two-day winning streak during the early European trading hours on Tuesday. Markets might turn cautious ahead of the release of key US economic data, including US employment and inflation reports that were pushed back slightly due to the recently ended four-day government shutdown.

GBP/USD edges lower below 1.3700 on UK political risks, BoE rate cut bets

The GBP/USD pair trades on a weaker note around 1.3685 during the European session on Tuesday. The Pound Sterling edges lower against the US Dollar amid political risk in the United Kingdom and rising expectations of near-term Bank of England rate cuts.

Gold drifts lower as positive risk tone tempers safe-haven demand; downside seems limited

Gold drifts lower during the Asian session on Tuesday and snaps a two-day winning streak, though it lacks strong follow-through selling and shows some resilience below the $5,000 psychological mark amid mixed cues. The outcome of Japan's snap election on Sunday removes political uncertainty, which, along with signs of easing tensions in the Middle East, remains supportive of the upbeat market mood.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.

Follow the money, what USD/JPY in Tokyo is really telling you

Over the past two Tokyo sessions, this has not been a rate story. Not even close. Interest rate differentials have been spectators, not drivers. What has moved USD/JPY in local hours has been flow and flow alone.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.