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MTrading Team • 2023-09-25

AUDUSD justifies risk-barometer status despite US Dollar’s retreat

AUDUSD justifies risk-barometer status despite US Dollar’s retreat

After witnessing mixed PMIs from major economies and a hawkish Fed halt, not to forget the ECB’s dovish hike, traders appear mostly cautious on early Monday. The reason could be linked to the anxiety ahead of the top-tier inflation clues from Germany, Europe, the US and Japan. Additionally, fresh debt woes in China, triggered by Evergrande updates, also amplify the downbeat sentiment.

It’s worth noting, however, that the US Dollar fails to cheer the risk-off mood amid the market’s preparations for this week’s US consumer confidence, Durable Goods Orders and the Fed’s preferred inflation gauge. Also, sluggish yields at the multi-year high are an extra challenge for the Greenback.

Even so, the AUDUSD pair remains depressed due to its ties with China, as well as dovish RBA concerns, whereas the Gold price struggles for clear directions after bouncing off a five-week-old rising support line the previous day. Further, Crude Oil price prints mild gains after posting the first weekly loss in four while EURUSD, GBPUSD and USDJPY remain mostly directionless.

Elsewhere, BTCUSD and ETHUSD also remain pressured amid heavy option positions and ETF approvals.

Following are the latest moves of the key assets:

  • Brent oil picks up bids to $93.85 after snapping three-week winning streak, up 0.40% intraday at the latest.
  • Gold price prints mild losses to reverse the previous day’s corrective bounce around $1,923 by the press time.
  • USD Index stays directionless around 105.65-70 as we write, after 10-week uptrend.
  • Wall Street closed with minor losses but the Asia-Pacific stocks edged lower. That said, equities in Europe and the UK print mild gains at the latest.
  • BTCUSD and ETHUSD print mild losses to around $26,200 and $1,580 as we write.
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Dicey markets prevail

On Monday, BoJ Governor Kuroda defended the easy-money policy and the ECB officials also hesitated to entertain hawks while fears that China’s Evergrande again test the default limit and roil the mood. However, Friday’s mixed PMIs from major economies, with the growth of the US services activities challenging the Fed hawks, test the pessimists elsewhere, especially amid the sluggish yields.

AUDUSD bears the burden of its close ties with China and dovish RBA bias ahead of this week’s key Aussie inflation data, as well as the US statistics mentioned above. However, the NZDUSD struggles a bit as the RBNZ appears less dovish than the RBA.

On a different page, the Asia-Pacific shares edged lower as the Wall Street benchmarks closed with mild gains but the European equities appear less pessimistic. Furthermore, Gold Price remains defensive after bouncing off a five-week-old rising support line whereas the crude oil stays slightly firmer after snapping a tree-week uptrend.

It should be noted that the crypto traders are preparing for the early October ETF approvals amid fears of huge BTCUSD and ETHUSD positions which challenge the bulls.

  • Strong buy: USDCAD
  • Strong sell: ETHUSD, GBPUSD, Gold
  • Buy: USD Index, Nasdaq, USDJPY

ECB’s Lagarde, US data to entertain traders…

Moving on, the ECB President Christine Lagarde’s speech and the US activity data from the Federal Reserve banks of Chicago and Dallas will entertain the momentum traders. However, a less active session is likely to prevail considering the market’s dilemma about the central bankers’ moves and the economic transition, as well as due to the cautious mood ahead of this week’s top-tier data.

May the trading luck be with you!