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MTrading Team • 2022-07-18

Crude rallies on trader’s optimism during a sluggish start to the crucial week

Crude rallies on trader’s optimism during a sluggish start to the crucial week

Global markets witness mildly positive risk appetite during early Monday amid receding fears of the Fed’s 100 bps rate hike. Adding to the risk-on mood were headlines from China suggesting more efforts to propel the world’s second-largest economy.

Firmer sentiment joins the absence of Fed speakers to exert downside pressure on the US dollar. The same help prices of gold to rebound from the yearly low while crude oil rises the most in over a week as US President Joe Biden’s Middle East visit appear to fail in easing the energy support crunch.

GBPUSD gains the most among the G10 currencies on optimism surrounding the UK’s politics. On the other hand is the USDCHF pair that struggles to convince markets on talks surrounding the Swiss National Bank’s (SNB) next move.

Further, BTCUSD approaches a monthly peak while ETHUSD rises to a five-week high while tracking equities and softer USD.

Following are the latest moves of the key assets:

  • Brent oil rises the most in seven days as bulls poke the $105.00 mark, up 2.7% intraday by the press time.
  • Gold rebounds from yearly low while printing the first daily gains in three with 0.65% intraday gains to $1,720.
  • USD Index drops for the second consecutive day, down 0.50% on a day near 107.50 at the latest.
  • FTSE 100, STOXX50 and DAX are all gaining around 1.20-50% intraday amid the market’s optimism.
  • Wall Street closed with notable gains on Friday as traders cheered Fed hawk’s retreat.
  • BTCUSD rises more than 7.0% as it approaches a monthly high above $22,000 while ETHUSD renews a one-month peak as it rises towards $1,500, up 9.5% intraday.
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Fed hawks step back

Downbeat US consumer expectations joined mixed comments from the Fed policymakers to renew risk appetite on Friday. The firmer mood gets support from softer-than-expected US industrial production and expectations of the hawkish ECB outcome, other than the widely expected 0.25% rate hike.

Additionally, China’s efforts to avoid a real estate crackdown, as well as infuse money markets to overcome the virus-led pessimism, also underpinned the market’s optimism.

The USD Index bears the burden of upbeat sentiment amid the absence of Fed policymakers’ speech ahead of late July FOMC, which in turn favored gold to snap a two-day downtrend. Further Brent oil prices jump the most in seven days as US President Biden appears to lack cooperation from the OPEC leaders as he pushes for more output.

It’s worth noting that hopes of a wage hike and ex-Chancellor Rishi Sunak’s brighter odds of being the next British PM appeared to have favored GBPUSD bulls.

Cryptocurrencies were the major gainers as markets reassess their previous risk-off mood. Also favoring the BTCUSD and the ETHUSD prices are the talks suggesting more blockchain developments.

⏫ 🟢 Strong buy: USDCAD

⏬ 🔴 Strong sell: Nasdaq, silver, ETHUSD

⬆️ 🟢 Buy: USD Index, USDJPY

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

No major data/events on Monday

Although PMIs and the ECB will join a slew of the UK data to entertain traders during this week, a light calendar on Monday could offer a sluggish day ahead. Even so, the latest risk-on mood can keep weighing on the US dollar, which in turn may help Antipodeans and commodities.

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