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MTrading Team • 2023-08-08

EURUSD struggles to justify firmer US Dollar, risk-off mood amid mixed concerns

EURUSD struggles to justify firmer US Dollar, risk-off mood amid mixed concerns

Traders remain cautious during early Tuesday but the fears emanating from China joined mixed concerns about the global central banks’ next moves to spoil the risk appetite. The same, however, fails to underpin the US Treasury bond yields even as the US Dollar rises for the second consecutive day.

Even so, the EURUSD remains lackluster by posting only minor losses while AUDUSD and NZDUSD drop the most in a week due to the Aussie-China and the Sino-Kiwi ties, as well as firmer USD. On the same line, crude oil drops more than 1.0% whereas Gold also extends the week-start losses. Furthermore, the US stock futures print mild losses and the Asia-Pacific shares edge lower.

Elsewhere, BTCUSD bears the burden of the US Dollar despite witnessing positives from the crypto industry but the ETHUSD prints minor gains amid comparatively better news for Ethereum holders.

Following are the latest moves of the key assets:

  • Brent oil extends the previous day’s pullback from four-month high towards breaking $85.00, down 1.35% intraday near $84.80 by the press time.
  • Gold price also drops for the second consecutive day to $1,931 at the latest.
  • USD Index prints two-day winning streak near 102.40, up 0.30% on the day as we write.
  • Wall Street benchmarks closed with minor gains but the stocks in the Asia-Pacific zone edged lower. That said, equities in Europe and UK trade with minor losses by the press time.
  • BTCUSD stays pressured around $29,150 after a three-week downtrend but ETHUSD print mild gains to $1,830 of late.
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Risk aversion fails to drown EURUSD

Downbeat China trade numbers join geopolitical concerns about the dragon nation to amplify the risk-off mood. Adding strength to the sour sentiment can be mixed comments from the global central bankers as they push back the market’s previous hopes of witnessing softer rates sooner.

Elsewhere, downbeat Aussie data and downbeat German inflation figures, coupled with the looming economic woes surrounding Eurozone and China, also contribute to the risk aversion.

Furthermore, the cautious mood ahead of this week’s top-tier inflation clues from China, Australia, New Zealand and the US, as well as the first readings of the UK Q2 GDP, allow bears to keep the reins.

While major markets are witnessing sour sentiment, the cryptos have some good news as Ripple seems winning an industry case against the US SEC. Further, PayPal’s favor of Ethereum also puts a floor under the BTCUSD and ETHUSD prices, even if the US Dollar prods the Bitcoin recovery amid cycle fears and regulatory woes.

  • Strong buy: USDCAD
  • Strong sell: ETHUSD, GBPUSD, Gold
  • Buy: USD Index, Nasdaq, USDJPY

Second-tier US data in focus

While the inflation numbers are likely to start fueling market volatility from Wednesday, the second-tier housing and trade numbers from the US may entertain intraday traders on Tuesday. Even so, the risk catalysts will be more reliable while predicting short-term market moves.

May the trading luck be with you!