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MTrading Team • 2024-03-15

EURUSD bears keep control below 1.0900 with eyes on US macro, Fed Meeting

EURUSD bears keep control below 1.0900 with eyes on US macro, Fed Meeting

The risk appetite remains downbeat early Friday as geopolitical woes join concerns of major central banks’ “higher for longer” rate agenda. The same allows the US Dollar to brace for the first weekly gain in four while cheering upbeat consumer-centric details and sour sentiment.

While the US Dollar cheered strong data and prepared for next week’s hawkish FOMC, EURUSD failed to cheer the European Central Bank (ECB) officials’ defense of higher rates. Further, GBPUSD also remained depressed as market players raised doubts about the UK’s economic soundness to defend the higher rates for longer.

Elsewhere, USDJPY drops the most among the G10 currency pairs, paring the previous day’s gains, but the AUDUSD and NZDUSD hold lower grounds due to the risk-off mood and downbeat China news.

Further, Gold price prints mild gains to consolidate the weekly loss while Crude Oil seesaws after refreshing the 4.5-month high the previous day.

Cryptocurrencies marked heavy drawdown and remain pressured at the latest amid traders’ liquidation of positions at multi-year highs.

Following are the latest moves of the key assets:

  • Brent oil remains mildly bid near $85.60 after rising to a 4.5-month high.
  • Gold price pares the first weekly loss in four around $2,167 while reversing the previous day’s fall.
  • USD Index seesaws near 103.40 while preparing to snap a three-week downtrend.
  • Wall Street closed with mild losses while the Asia-Pacific stocks edged lower. Further, the shares in Europe and the UK remained indecisive during the initial hour.
  • BTCUSD extends pullback from an all-time high to near $68,200 while ETHUSD also stretches the previous retreat from multi-year top to around $3,730.
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US Dollar braces for positive week ahead of FOMC…

Firmer prints of the US consumer-centric data and inflation clues so far helped the US Dollar Index (DXY) to snap a three-week downtrend and challenge the gold buyers ahead of next week’s key monetary policy meeting from the US Federal Reserve (Fed).

On Thursday, the US Retail Sales for February improved and joined the upbeat prints of the Producer Price Index (PPI), as well as softer US Jobless Claims, to underpin the US Dollar’s run-up. The greenback’s rally exerted downside pressure on major commodities and currencies, especially after the strong Consumer Price Index (CPI) published earlier in the week.

The US data also soured the sentiment amid hopes of delayed rate cuts from the Fed. The risk appetite additionally worsened on news that Russia moved tactical nuclear weapons into Belarus, backing up its previous threats to NATO, which in turn allowed the US Dollar to edge higher and weigh on the riskier assets like equities and Antipodeans.

It’s worth noting that Crude Oil rose on the supply crunch fears due to the Russian-linked news, as well as chatters that the US Department of Energy (DOE) is up for buying about 3 million barrels of oil for Strategic Petroleum Reserve (SPR).

Elsewhere, USDJPY refreshed its weekly high before retreating from 148.65 as Japan Chief Cabinet Secretary Yoshimasa Hayashi said, “The Bank of Japan (BoJ) will stably hit its inflation target.”On the same line was Japan Finance Minister Shunichi Suzuki who mentioned a strong trend of wage hikes to tease BoJ hawks and allow the Japanese Yen (JPY) to battle with the US Dollar’s rebound.

EURUSD has so far witnessed unimpressive statistics to defend the ECB officials’ hawkish remark. Additionally, there are chatters about the bloc’s economic soundness and hence the same exerts downside pressure on the Euro pair ahead of next week’s ECB President Christine Lagarde’s speech, as well as the Flash PMIs.

BTCUSD reversed from an all-time high and is currently bracing for the weekly loss after the UK Judge ruled out Craig Wright’s claims of being Satoshi Nakamoto, the pseudonymous creator of Bitcoin. Thursday’s slump resulted in more than $250 million of total liquidations. Not only Bitcoin, but Ethereum also slumped and is almost set for the first weekly loss in seven after a huge volume of ETH hit the exchanges so far in March ahead of the Duncan upgrade.

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

Eyes on the last round of US data before Fed…

Looking forward, preliminary readings of the University of Michigan’s (UoM) Consumer Sentiment Index (CSI) for March will join the 5-year inflation expectations to entertain the intraday traders.

However, major attention will be on next week’s Federal Open Market Committee (FOMC) monetary policy meeting amid speculations of a delay in the Fed rate cuts, which if confirmed could extend the US Dollar’s rebound. It’s worth noting that the markets have already priced in the June rate cuts and hence a strongly hawkish message needs to test the commodity buyers.

May the trading luck be with you!