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MTrading Team • 2023-05-31

AUDUSD refreshes yearly low as risk-aversion intensifies ahead of crucial data, events

AUDUSD refreshes yearly low as risk-aversion intensifies ahead of crucial data, events

Markets turn risk averse as top-tier data/events loom with mixed signals for optimists. That said, the US policymakers keep their dislike for the debt ceiling deal ahead of the House vote while the statistics fail to justify hawkish Fed bets, even as Fed’s Barkin suggests diminishing growth due to higher rates.

Elsewhere, RBA Governor Philip Lowe tried to be hawkish and the Aussie inflation also rose but the market fail to buy the fact amid expectations that the RBA rate has letter room towards the north. The same takes clues from the RBNZ’s intact rate peak and downbeat China activity data.

Furthermore, the risk-off mood favors the demand for the US Dollar and bonds, which in turn weighs on the yields.

It should be noted that stocks in the Asia-Pacific zone print losses whereas US stock futures also print losses despite mixed closing of Wall Street.

Talking about cryptos, BTCUSD and ETHUSD extend week-start pullback as regulatory clampdown looms, especially amid US default fears and rising participation.

Following are the latest moves of the key assets:

  • Brent oil drops for the third consecutive day, down 0.85% intraday near $73.30 by the press time.
  • Gold price prints mild losses around $1,958 at the latest.
  • USD Index defends upside break of a multi-day-old key resistance to poke two-month high of around 104.50 as we write.
  • Wall Street closed mixed but Asia-Pacific shares saw the losses while equities in the UK and Europe remains mildly offered by the press time.
  • BTCUSD and ETHUSD drop more than 1.0% to around $27,150 and $1,870 at the latest.
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Antipodeans lead the losers…

While the aforementioned catalysts weigh on risks, prices of commodities and Antipodeans remain on the dicey floor. It’s worth observing that the NZDUSD drops the most while AUDUSD follows the suit. Further, EURUSD also makes peace with bears as early inflation signals from the bloc hint at the hardships for the ECB. That said, Gold reverses the previous day’s corrective bounce whereas Oil prices declined toward the lowest levels since May 05.

Fears of more regulations in the cryptos and options market fears, as well as likely regulations from both fronts, namely the financial and environmental, drown the Bitcoin and Ethereum prices.

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

A big risk ahead…

While the US House of Representatives is up for voting on the debt ceiling deal and some of the key Republicans stand ready to turn down the agreement even if the default date is too close. Apart from that, Fed talks and Beige Book, not to forget inflation clues from the bloc, could become some more risk catalysts that could offer a volatile day ahead.

May the trading luck be with you!