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MTrading Team • 2024-04-08

Crude Oil extends pullback from multi-month high on mixed geopolitical news, US Dollar rebound

Crude Oil extends pullback from multi-month high on mixed geopolitical news, US Dollar rebound

The risk complex remains slightly positive early Monday as weekend headlines suggest an easing in geopolitical woes. Also keeping the traders optimistic are talks about lower rates from major central banks outside the US. However, hawkish Fed concerns and the recently firmer US jobs report allow the US Dollar to defend Friday’s recovery.

While the US Dollar defends the previous day’s corrective bounce, EURUSD lacks clear directions whereas GBPUSD stays pressured after posting weekly gains. Further, AUDUSD and NZDUSD pick-up bids to reverse Friday’s pullback but the USDJPY remains firmer amid upbeat yields and headlines challenging higher rates in Japan.

Gold price reached an all-time high of $2,354 but eased afterward while Crude oil holds lower grounds after reversing from the highest level since October the previous day.

On a different page, BTCUSD and ETHUSD both pick up bids to reverse the weekly loss amid increased participation in crypto, lower mining costs and positive expectations from Bitcoin halving.

Following are the latest moves of the key assets:

  • Brent oil remains depressed at $85.90, down nearly 1.0% intraday while extending the previous day’s U-turn from a multi-day high.
  • Gold price reached an all-time high before easing to $2,335 by the press time.
  • The USD Index stays mildly bid near 104.40 while stretching the previous day’s rebound from a two-week low.
  • Wall Street closed on the positive side while the Asia-Pacific stocks edged higher. Further, shares in Europe and the UK traded mixed during the initial trading hour.
  • BTCUSD and ETHUSD both rise nearly 3.0% intraday to around $71,200 and $3,565 at the latest.
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US Dollar licks its wounds after snapping three-week uptrend…

On Friday, US Nonfarm Payrolls (NFP) marked a stellar addition to the private workforce and joined an easing in the Unemployment Rate to underpin the US Dollar’s rebound from the weekly low. The same allowed US National Economic Adviser Lael Brainard and a slew of Federal Reserve (Fed) officials to rule out the need for imminent rate cuts and propel the Treasury bond yields.

However, the mixed performance of the US Average Hourly Earnings, also known as the wage growth data, joined the concerns surrounding lower rates from major central banks outside the US to challenge the Greenback bulls.

With this, the US Dollar Index (DXY) marked the first weekly loss in four, before recovering to 104.35 at the latest, whereas the Wall Street benchmarks closed on the positive side. It’s worth noting that the upbeat performance of the US top-tier Treasury bond yields challenges the Gold buyers of late.

EURUSD managed to snap a three-week holiday despite failing to rise on Friday. While the broad-based US Dollar retreat could be held responsible for the Euro pair’s run-up, the chatters about witnessing early rate cuts from the European Central Bank (ECB) seem to challenge the pair buyers of late.

On the same line, GBPUSD marked the second consecutive weekly gain as the Bank of England (BoE) officials pushed back calls for early rate cuts and gained support from the mixed UK data.

It’s worth noting that the USDJPY remains on the front foot as the Bank of Japan (BoJ) policymakers rule out chances of further rate hikes while Japan’s real wages softened for the consecutive 23rd time.

Elsewhere, Gold marked the biggest weekly jump in a month, refreshing the all-time high early Monday before retreating from $2,354 of late. That said, Crude Oil also marked the heaviest run-up in two months, as well as rose for the fourth consecutive week, before easing from a five-month high. It should be observed that the geopolitical tensions surrounding the Middle East, China, and Russia joined a pullback in the US Dollar to propel the commodities before Friday’s consolidation after the US jobs report. Further, weekend headlines suggesting progress in Gaza ceasefire talks and an absence of risk-negative headlines from China during the first day of US Treasury Secretary Janet Yellen’s Beijing visit tested the buyers of Gold and crude so far on Monday.

Talking about cryptocurrencies, BTCUSD and ETHUSD both posted weekly losses amid the traders’ preparations for the Bitcoin halving and a slump in gas costs for Ethereum mining after the Duncan upgrade. Even so, the chatters that BlackRock increases the market participation into the crypto trading via ETF joined hopes of witnessing further upside in the Bitcoin prices to favor the BTCUSD and ETHUSD buyers of late.

  • Strong buy: USDCAD, USDJPY, US Dollar
  • Strong sell: AUDUSD, NZDUSD, GBPUSD
  • Buy: BTCUSD, ETHUSD, Nasdaq, Gold

Sluggish start to the key week…

A lack of major data/events joined mixed geopolitical headlines and a cautious mood ahead of US inflation, Fed Minutes and monetary policy meetings of the ECB and the Bank of Canada (BoC) to restrict the market moves on early Monday. The lackluster momentum is likely to prevail for the rest of the day amid an absence of top-tier catalysts. That said, softer Japanese wage growth and upbeat German Industrial Production details allowed USDJPY buyers and challenged the EURUSD sellers of late. It should be noted that the commodities have strongly rallied in the last few days and hence a corrective move appears brewing, which in turn highlights this week’s US catalysts for witnessing any major move.

May the trading luck be with you!