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Denis Sergienko • 2022-11-16

EURUSD bulls cheer firmer sentiment ahead of key data/events

EURUSD bulls cheer firmer sentiment ahead of key data/events

Markets portray a perfect U-turn of the early-day risk-aversion despite looming concerns over Poland and China. The underlying optimism seems to take clues from the hopes of easy rate hikes as traders await the US Retail Sales data for October.

EURUSD leads the bulls amid hawkish ECB concerns and the recently firmer Eurozone data while the GBPUSD fails to cheer UK’s strong inflation numbers. USDCNY snaps a five-day downtrend amid pessimism surrounding the dragon nation.

Prices of gold and crude oil fail to cheer softer US dollar amid cautious mood and the mixed headlines over rocket fires in Poland.

BTCUSD and ETHUSD struggle to defend the two-day rebound amid fresh fears for the crypto market.

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Following are the latest moves of the key assets:

  • Brent oil fades the previous day’s bounce off a three-week low, mildly offered near $94.60 at the latest.
  • Gold also fades upside momentum at the highest levels in three months surrounding $1,780.
  • USD Index remains pressured towards 106.00, down 0.40% around a three-month low as we write.
  • Stocks in Europe and the UK are mildly bid but those from Germany print mild losses. Further, Wall Street printed small gains despite the late pullback in sentiment.
  • BTCUSD and ETHUSD both snap a two-day uptrend as sellers attack the $16,800 and $1,250 levels respectively.

Risk appetite improves after a tepid pullback

An alleged Russian attack on Poland, a NATO country, triggered a risk-off mood late Tuesday as global leaders rushed for emergency meetings and showed readiness to take steps. However, the news that it was a mistaken fire from Ukraine to counter Russian rockets that killed two Polish people tamed the risk aversion afterward. Also challenging the sentiment was the highest levels of Covid numbers from China since April 2021.

On the contrary, hopes of further stimulus from Beijing and ECB policymakers’ optimism, backed by the latest upbeat data, joined softer US PPI to recall the rosy mood and exerted downside pressure on the greenback.

Elsewhere, news of BlockFi’s potential bankruptcy and harsh stand from the US watchdogs keep BTCUSD and ETHUSD on the bear’s radar.

  • Strong buy: USDJPY
  • Strong sell: ETHUSD
  • Buy: USD Index, USDCAD, Nasdaq, EURUSD
  • Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

US Retail Sales, ECB President Lagarde will be in the spotlight

Although the recent waves in the market are against the US dollar, the key consumer-centric data, after the inflation, is still left pending for publication and can very well recall the greenback buyers as the Fed policymakers haven’t welcomed doves so far. On the other hand, looming fears of the recession may stop ECB’s Lagarde from being optimistic and can weigh on the EUR. Hence, traders should remain cautious before taking any big positions ahead of the scheduled outcomes.

May the trading luck be with you!