• EURUSD on the defensive after rejection at 1.1767
  • EURGBP bounce back on track amid pound weakness
  • XAUUSD under immense pressure after pullback below $1800
  • Bitcoin corrects lower but well supported for a bounce-back above $48,000

The EURUSD is yet again on the defensive after a recent bounce back from four-month lows. Bulls have found the going tough, struggling to push the pair above the 1.17600 level. The strong resistance comes at the backdrop of the US dollar remaining resilient despite the recent slide to one-week lows.

EURUSD correction

The US dollar has shown some weakness in recent days amid easing concerns about COVID-19 that had fuelled demand for safe-haven the past week. Amid the dollar weakness, the euro has struggled to edge higher with a three-day uptrend at risk.

After rejection at the 1.1760 level, EURUSD appears to have found support at the 1.1730 level.

chart showing EURUSD bounce back and pullback

A sell-off followed by a close below the 1.1730 level could result in further losses, probably to the 1.1700 level, which is turning out to be a critical support level. On the flip side, the pair rallying and finding support above 1.1760 levels would reignite a run towards the 1.1800 level.

EURUSD upward momentum is dependent on how the dollar performs. The greenback has pulled lower in recent days amid concerns about the Federal Reserve moving to taper. Easing COVID-19 woes should continue to offer support to the euro against the greenback. Additionally, the focus is on the Jackson Hole Symposium event later in the week that should provide insight on the FED’s next course of action.

EURGBP bounce back

Amid euro weakness against the dollar, it continues to hold firm against the British pound. The EURGBP pair has since bounced off one and a half years low. The pair has found strong support above the 0.8500 level after dipping to 0.8449 last week.

Chart showing EURGBP bounce back

However, the upward momentum is waning as traders react to COVID-19 conditions in the block. French COVID-19 hospitalization jumped to two-month highs early in the week even as Germany recorded a decline in deaths.

The British pound has also come under pressure on the UK, registering the highest weekly total of COVID-19 deaths. Additionally, the pound has been weighed heavily by emerging Brexit concerns, having emerged that the EU is planning to block the UK from joining the 2007 Lugano convention.

Gold rally stalls

Gold bounces back from five-month lows below the $1700 level in the commodity markets and is experiencing strong resistance. XAUUSD struggled to hold on to gains above the $1800 level pulling back early Wednesday morning.

After the pullback, support on any correction is seen at the $1790 level.

Chart showing gold’s strong resistance near $1800

A sell-off followed by a close below the $1790 level could accelerate the correction lower to the $1780 level. A spike in open interest by 382 contracts on Tuesday might as well signal further corrections in the near term.

US indices roar to record highs

US stocks bounce back after a recent correction owing to tapering concerns, continuing to gather pace. Major stock indices rose to record highs supported by strong corporate earnings and easing COVID-19 fears. The S&P 500 recorded its 50th record close on Tuesday after rising 0.1%. The Dow Jones Industrial Average rose 0.1% as tech-heavy Nasdaq rose 0.5%.

Chart showing XAUUSD rally to record highs

The upward momentum in the equity markets remains well supported by strong economic and corporate earnings that affirm economic growth. How the FED intends to taper is the major headwind that continues to fuel uncertainty. Consequently, investors await the FED chair speech on Friday to gauge the next course of tapering.

Bitcoin pullback

In the cryptocurrency market, Bitcoin pulled back after powering through the $50,000 level early in the week. The pullback might as well be a minor correction as BTCUSD remains well supported above the $48,000 level.

Chart showing BTCUSD correction lower

On the flipside, BTCUSD closing below the $48,000 level could result in further sell-offs to $44,000, the next substantial support level.

Despite the correction, the BTCUSD outlook remains bullish amid reports of whales jumping back to action. Immediate reports indicate that accounts holding more than $50 million worth of bitcoin have been increasing their buying since the end of June.