Forex Today: Markets turn choppy ahead of key events

Here is what you need to know on Wednesday, August 24:

After having snapped a four-day winning streak on disappointing data releases on Tuesday, the US Dollar Index (DXY) started to edge higher in the early European morning on Wednesday. In the absence of high-tier data releases, the market action turns choppy with investors remaining cautious ahead of the Jackson Hole Symposium later this week. In the second half of the day, July Pending Home Sales and Durable Goods Orders data will be featured in the US economic docket. Meanwhile, US stock index futures post modest losses and the 10-year US Treasury bond yield continues to fluctuate above 3%.

On Tuesday, the data from the US revealed that the business activity in the private sector continued to contract in August with the S&P Global Composite PMI dropping to 45 from 47.7 in July. Other data showed that New Home Sales declined by 12.6% in July following June's contraction of 7.1%. The dollar lost interest after these data and the DXY lost nearly 0.5% on a daily basis. Nevertheless, the CME Group FedWatch Tool shows that markets are still pricing in a 51.5% probability of a 75 basis points rate hike in September. 

Several news outlets reported on Tuesday that OPEC+ may lean towards oil output cuts when and if Iranian production returns depending on the revival of the nuclear deal. Crude oil prices continued to push higher and the barrel of West Texas Intermediate gained 3.5% before settling near $94.00.

EUR/USD staged a rebound and tried to reclaim parity after having dropped to its weakest level in nearly 20 years at around 0.9900 on Tuesday. The pair, however, failed to gather bullish momentum and retreated toward 0.9950 early Wednesday.

GBP/USD gained more than 50 pips on Tuesday and went into a consolidation phase above 1.1800 during the Asian trading hours on Wednesday. The pair trades in a relatively tight channel so far on the day.

USD/JPY fell sharply during the American session on Tuesday but the rebound witnessed in the 10-year US Treasury bond yield helped it erase a large portion of its daily losses. The pair moves sideways above 136.50 on Wednesday.

Gold capitalized on the broad-based selling pressure surrounding the greenback and registered daily gains for the first time since August 12. XAU/USD is struggling to find direction as it moves up and down in a narrow channel below $1,750.

Bitcoin is having a difficult time making a decisive move in either direction and is trading near the mid-$21,000s. Ethereum registered modest daily gains on Tuesday but it's already down more than 1% on the day near $1,600 early Wednesday.