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MTrading Team • 2023-06-27

EURUSD bulls cheer hawkish comments from ECB’s Lagarde, downbeat USD

EURUSD bulls cheer hawkish comments from ECB’s Lagarde, downbeat USD

Global markets turn optimistic during early Tuesday, which in turn joins mixed US data and positioning for the key events to weigh on the US Dollar. While tracing the catalysts, headlines from China and Russia gain major attention amid a lackluster Asian session before ECB President Christine Lagarde propelled Euro.

With this, the AUDUSD and EURUSD lead the market’s winners among the G10 currencies versus the greenback. That said, USDCHF appears dicey whereas the USDCAD struggles to cheer mildly bid Oil price as traders await Canadian inflation and US data.

Equities in the Asia-Pacific zone edged higher and so did the S&P500 Futures, as well as the shares in Europe and the UK. On the other hand, the yields recover and the commodities benefit from the softer US Dollar.

Elsewhere, BTCUSD and ETHUSD regain upside momentum ahead of heavy options expiry and optimism about the July month which has historically favored cryptocurrency buyers.

Following are the latest moves of the key assets:

  • Brent oil rises half a percent to $74.70 by the press time.
  • Gold price prints three-day winning streak despite positing minor gains near $1,925 as we write.
  • USD Index drops for the second consecutive day, to 102.50 at the latest.
  • Wall Street closed with minor losses but Asia-Pacific shares edged higher. That said, equities in Europe and UK are also on the positive side to begin the trading day.
  • BTCUSD and ETHUSD print mild gains around $30,300 and $1,880 by the press time.
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Lagarde fuels Euro amid cautious optimism…

While news from China appears upbeat, the absence of major geopolitical jitters from Russia and the US Dollar’s retreat allowed the traders to remain positive of late. The same joined upbeat comments from ECB President Lagarde to propel the EURUSD pair.

ECB’s Lagarde confirmed that the fight against inflation isn’t over and hence suggested more rate hikes moving forward, which in turn allowed the Euro to refresh intraday high following the news.

Optimism for Chinese companies and PBoC’s money market moves to defend Asian stock traders. It should be noted that the dragon nation is likely to witness easy registration norms overseas as lobbyists favor Beijing-backed companies’ easy listing norms.

That said, the positive mood at the options markets and historically positive July for the cryptos allowed the BTCUSD and ETHUSD to remain firmer even as the US SEC keeps challenging the optimism.

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

ECB Forum, US data eyed

Although ECB’s Lagarde just spoke, a slew of central bankers from the US and the UK are up for speeches at the annual ECB Forum and can move the markets. Also important to watch are the US Durable Goods Orders and CB Consumer Sentiment data. Should the policymakers defend the “higher for longer” rates, as Lagarde did, and the US data also offer positive surprises, the US Dollar may recover.

May the trading luck be with you!