DBG Markets: Market Report for August 5, 2026

Risk Appetite Surges on Falling Yields; All Eyes on Labor & PMI Data

GBPUSD, XAUUSD, Bitcoin & Ethereum Analysis

Wall Street accelerated its August rally on Tuesday, August 4, 2026, with major benchmarks surging to new all-time highs. Strong corporate earnings and easing energy prices provided a dual boost to risk appetite ahead of key economic data releases scheduled for today.

Falling Yields, Rising Sentiment

The continued decline in energy costs has significantly dampened inflation fears and led traders to scale back aggressive Federal Reserve rate-hike expectations:

· Fed Rate Hike Odds Shift: Money markets are increasingly pricing in a policy hold for September. According to the CME FedWatch tool, the probability of the Fed keeping rates unchanged in September has risen to roughly 41.1%.

· Treasury Yields Slide: US Treasury yields extended their drop across the curve. The benchmark 10-year US Treasury yield eased to 4.615%, while the policy-sensitive 2-year yield fell to 4.19%.

· Dollar & Risk Appetite: Sliding yields continue to exert downside pressure on the US Dollar, creating a highly supportive environment for risk assets and driving broad equity benchmarks to record levels.

Today's Outlook: Ahead of Fridays Non-Farm Payrolls (NFP) report, market focus today turns to ADP private payrolls (July), the S&P Global Services PMI, and the ISM Non-Manufacturing PMI.

Until these reports drop, equity markets are navigating under the clear optimism of the current macro narrative.

Technical Analysis & Asset Outlook

GBP/USD: Bullish Momentum Testing Key Overhead Resistance

In tandem with the broader sell-off in the US Dollar (following earlier bullish setups on EUR/USD and AUD/USD), GBP/USD has maintained its upward trajectory, holding firm above its short-term moving averages that track its uptrend.

GBPUSD, H2 Chart

The pair has established strong structural support after reclaiming the 1.3380 – 1.3400 consolidation belt.

Spot Gold (XAU/USD): Imminent Breakout on Falling Yields

Spot gold is nearing the apex of a converging triangle pattern. While strong equity risk appetite has temporarily limited immediate upside breakout momentum due to fading safe-haven demand, easing Treasury yields and dollar weakness provide a favorable structural backdrop for an imminent breakout.

XAUUSD, H4 Chart

Breakout Catalyst: Declining Treasury yields and persistent dollar weakness could serve as the exact catalyst required to trigger an upside breakout.

XAUUSD, H2 ChartCryptocurrencies: Can Risk Appetite Spill Into Crypto？

With risk appetite surging and equities reaching new highs, attention turns to whether this liquidity will spill over into the crypto market. While a spillover is not guaranteed, current technical setups warrant close monitoring.

Bitcoin (BTC/USD): Focus on Downtrend Channel Resistance

Bitcoin is attempting to capitalize on broader market risk-on sentiment, but remains constrained within a well-defined descending channel.

BTCUSD, H4 Chart

Technical Setup: Traders should focus closely on the upper boundary of the downtrend channel near 63,800 – 64,200.

Outlook: A confirmed bullish breakout above 64,200 (or a clean exit from the downtrend channel) is required to ignite a broader risk-on rally toward 66,000. Failure to break out leaves Bitcoin vulnerable to another leg down toward 61,500 – 62,000.

Ethereum (ETH/USD): Range Testing 1,880 Breakout Point

Ethereum continues to trade inside a tightening consolidation wedge above key structural support.

ETHUSD, H4 Chart

ETH continues to defend the 1,835 support level, which marks the lower floor of the current structure. However, traders should watch for an upside breakout above the 1,880 resistance level.

Outlook: A sustained move past 1,880 would confirm a bullish breakout, suggesting a potential continuation following a brief pause between 1,835 and 1,880, targeting 1,940. Conversely, a loss of 1,835 exposes the pair to downside risk toward 1,750.

Bottom Line & Asset Summary

Wall Street extended its August rally as falling oil prices and sliding Treasury yields (10-year down to 4.615%) drove CME FedWatch odds for a September rate hold to 41.1%. As markets await ADP and PMI data today ahead of Friday's NFP, Gold is coiling above $4,050 for a triangle breakout, GBP/USD targets 1.3500 – 1.3520, and Crypto tests key channel resistance levels.

· GBP/USD: Bullish Trend; defending 1.3380 – 1.3400 support, targeting an upside extension toward 1.3500 – 1.3520 and 1.3540.

· Spot Gold (XAU/USD): Imminent Breakout Watch; coiling above $4,050 inside a converging triangle, eyeing an H2/H4 candle close above $4,080 – $4,100 to trigger an upside expansion.

· Bitcoin (BTC/USD): Channel Test; testing resistance at 63,800 – 64,200, where a breakout unlocks broader upside momentum toward 66,000.

· Ethereum (ETH/USD): Range Consolidation; holding firm above 1,835 support, eyeing a breakout above 1,880 resistance toward 1,940.