Market Update - 02 Aug 2023

EUR/USD drops below 1.1000 amid cautious market mood ahead of US Employment data. In spite of downgraded ratings by FITCH, the US Dollar Index has rebounded after a corrective move to near 102.00. Outperformance by Eurozone in the April-June quarter on GDP parameter could force the ECB to raise interest rates. (FXStreet)

USD/CHF pauses four-day winning streak amid market’s indecision amid dicey US Dollar. Fitch downgrades US credit rating but market players rule out fears. Rising trend channel from Friday, sustained trading beyond key moving averages keep Swiss Franc pair buyers hopeful. Sellers need validation from 0.8700 support confluence to retake control. (FXStreet)

EUR/GBP bulls take a breather at weekly top after rising the most in fortnight the previous day. Market’s reassessment of mixed Eurozone, German data joins UK recession woes to prod buyers. BoE is expected to ease on rate hikes as inflation woes recede, 0.25% lift in benchmark rates loom on Thursday. ECB’s dovish hike may prod pair buyers even if the BoE tames the hawks. (FXStreet)

AUD/JPY extends its downside near the 93.80 area on Wednesday. BoJ policymaker stated that Japan is in a position where it is critical to maintain an easy policy. AUD/JPY trades within a descending trend channel on the four-hour chart. The immediate level is seen at 95.50; the initial support level is located at 93.30. (FXStreet)

USD/JPY reverses from three-week high, prints the first daily loss in four as BoJ’s Uchida sounds hawkish. 61.8% Fibonacci retracement, 21-DMA limits Yen pair’s downside amid bullish MACD signals. Descending trend line from late October 2022 appears a tough nut to crack for bulls. (FXStreet)

The index extends the upside momentum north of 102.00. US yields look for direction in the European morning. The ADP report will take centre stage later in the NA session. The USD Index (DXY), which gauges the greenback vs. a bundle of its main competitors, keeps the optimism well and sound for yet another session on Wednesday. (FXStreet)

GBP/JPY corrects sharply from a three-week high and is pressured by reviving safe-haven demand. The risk-off impulse provides a strong lift to the JPY and is seen as a key factor weighing on the cross. The BoJ-BoE policy divergence should limit losses ahead of the central bank event risk on Thursday. (FXStreet)

AUD/USD drifts lower for the second straight day and drops to a nearly two-month low. The risk-off impulse, China’s economic woes and the RBA’s inaction weigh on the Aussie. Retreating US bond yields undermines the USD, though fails to lend support to the pair. (FXStreet)

USD/CAD attracts some dip-buying and edges higher to 1.3305, gaining 0.19% for the day. The next barrier for USD/CAD is located at 1.3350; 1.3285 acts as an initial support level. The Relative Strength Index (RSI) stands above 50. (FXStreet)

WTI crude oil seesaws at multi-day high as risk-off mood prods energy buyers. Notable draw in Oil inventories, the heaviest slump in OPEC crude output in three years favor bulls. US credit rating cut, fears of US-China tussle prod sentiment and the WTI buyers. US ADP Employment Change for July, EIA Weekly Oil Storage Change eyed for clear directions. (FXStreet)

Gold Price bounces off three week low but stays on bear’s radar on breaking key supports, now resistances. US credit rating cut prods US Dollar bulls, puts a floor under XAU/USD price. Fears of hawkish Fed moves, receding Gold demand from Asia weigh on bullion. Strong US employment data can bolster September Fed rate hike odds and exert downside pressure on XAU/USD. (FXStreet)

Silver struggles to preserve modest intraday gains, though holds above the weekly low. The technical setup warrants some caution before positioning for any meaningful slide.  A break below the $24.00 mark, or the 100-day SMA, is needed to confirm a breakdown. (FXStreet)

Source: FXStreet, DailyFX

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