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MTrading Team • 2022-10-03

A softer start to another key week

A softer start to another key week

Global markets began the NFP/PMI comprising week on a softer footing as traders took a breather after witnessing volatile days in the last. Even so, hawkish central banks and fears of recession kept optimists at the door.

US Dollar, however, stretched the first weekly loss in three and remained mildly offered whereas crude oil is the biggest gainer followed by NZDUSD and GBPUSD. 

Other than the market’s preparations for this week’s key data, political headlines from the UK and OPEC+ chatters also allowed the commodities and Antipodeans, as well as the GBPUSD, to remain firmer.

Elsewhere, gold prices also grind higher as US dollar weakness joined recession fears to direct traders towards the traditional risk-safety.

On the other hand, BTCUSD and ETHUSD snap a three-day downtrend as traders brace for consolidation of the latest losses.

Following are the latest moves of the key assets:

  • Brent oil rises nearly 4% during the first positive day in three, around $89.50 by the press time.
  • Gold prints mild gains around $1,663 as it prints the fifth positive day.
  • USD Index flirts with sellers around one-week low, down 0.13% intraday close to 112.00 at the latest.
  • FTSE remains mildly bid but Eurostoxx and DAX are down almost 1.0%.
  • Wall Street closed with losses led by Dow Jones’ 1.71% downside.
  • BTCUSD remains sidelined near $19,200, up 0.70%, whereas ETHUSD rises 1.20% while trying to regain $1,300 level.
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Consolidation phase ahead of the key catalysts

Monday’s market reversal isn’t a sign of optimism as traders remain worried about the global economic growth and the geopolitical tussles amid the energy crisis. Even so, hopes of higher rates by the RBNZ and the RBA allowed the NZDUSD and AUDUSD to lead the ex-USD pairs. 

UK’s announcement of reversing the earlier pledge to cut the income tax rate of 45%, which gained larger criticism, helped the GBPUSD pair to remain firmer. Further, USDJPY failed to cheer the US dollar weakness amid mixed performance of yields and fears of market intervention by the BOJ.

Friday’s inflation numbers from Eurozone and the US managed to keep the bears hopeful and put a floor under the US dollar’s downside. Even so, chatters that the OPEC+ will announce higher output cuts favored the crude oil prices.

Cryptocurrencies remained firmer for the first time in the last four amid downbeat USD and expectations that the latest developments in the field, namely the higher interest of the institutional investors and expectations of softer regulations to arrive, have favored the buyers.

⏫ 🟢 Strong buy: AUDUSD

⏬ 🔴 Strong sell: ETHUSD

⬆️ 🟢 Buy: USD Index, USDCAD, Nasdaq, USDJPY

⬇️ 🔴 Sell: DAX, FTSE 100, gold, BTCUSD

PMIs, Fedspeak and the UK politics

Moving on, the market players may witness softer trading hours but the US PMIs, comments from various Fed policymakers and the headlines from the UK’s political front may entertain the traders. Also, preparations for this week’s key central bank meetings, PMIs and the NFP could allow the latest cautious optimism to prevail. Even so, the US dollar is less likely to trim more of its gains.

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