Dollar slips amid profit-taking, stocks trying to recover

Traders took some profits from their USD longs, dragging the greenback slightly lower Thursday as the previous two days saw some massive declines in USD pairs (USD gains). 

The EURUSD pair fell below the 1.16 level for the first time since July 2020, effectively ending the long-term uptrend. The USDJPY pair rose to 112, the level last seen in February 2020.

Earlier in the session, the UK Office for National Statistics informed that the UK economy grew 5.5% in the second quarter, more than expected and a sharp improvement from the 1.6% fall the previous quarter. After two days of heavy losses, sterling was trying to recover, which brought the GBPUSD pair down 250 pips amid broad US Dollar strength.

Later today, Federal Reserve Chair Jerome Powell continues to testify with US Treasury Secretary Janet Yellen about the Coronavirus and CARES Act before the Committee on Financial Services, US House of Representatives, in Washington DC.

Additionally, the final revision of the US GDP for the second quarter is due and should remain unchanged at 6.6% annualized. Finally, traders will also focus on the usual Thursday’s jobless claims when analyzing the current trends in the labor market. 

Equities are trying to stage a comeback after the recent selling. So far, no crucial supports have been breached in US indices, and the medium-term uptrend remains intact, with investors probably getting ready to buy the dip again. 

Source: https://www.axiory.com/market-news/dollar-slips-amid-profit-taking-stocks-trying-to-recover