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MTrading Team • 2023-08-31

EURUSD bulls step back ahead of crucial EU, US inflation data

EURUSD bulls step back ahead of crucial EU, US inflation data

Anxiety ahead of the key inflation data from the Eurozone and the US restricts the market moves on early Thursday. Traders also struggle amid an absence of clear directions from the scheduled Asia-Pacific statistics, as well as the trader’s doubts about China's stimulus.

With this, the US Dollar prints the first daily gain in four, so far, whereas buyers of crude oil and gold lack momentum.

EURUSD leads the losers among the G10 currency pairs as the US Dollar rebound joins downbeat German Retail Sales whereas USDJPY bucks the trend with downbeat Treasury bond yields and hawkish bias about the Bank of Japan (BoJ).

Elsewhere AUDUSD edges higher amid mixed China PMI and Australian private CAPEX, Credit data.

It’s worth observing that the BTCUSD and ETHUSD lack momentum but stay depressed as market players consolidate Tuesday’s heavy gains before the frontline US data.

Following are the latest moves of the key assets:

  • Brent oil struggles at the highest level in two weeks, making rounds to $85.70 at the latest.
  • Gold price remains firmer around $1,946, up for the fourth consecutive day as we write.
  • USD Index rebounds from the 200-DMA despite lacking momentum around 103.30 of late.
  • Wall Street benchmarks closed with mild gains but the Asia-Pacific stocks edged lower, amid lackluster China moves. That said, equities in Europe and the UK print minor upside by the press time.
  • BTCUSD stays depressed at around $27,300 while ETHUSD seesaws near $1,700 at the latest.
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Mixed markets allow US Dollar to lick its wounds

The market’s indecision joins the US Dollar’s inability to break the 200-DMA support while posting the first daily gains. However, the buyers appear less confident as traders seek more clues to confirm the Fed’s future moves, with most details released so far favoring the dovish bias about the US central bank.

China’s headline NBS Manufacturing PMI improves but stays below the 50.0 level while the Non-Manufacturing PMI eases. Further, the Dragon Nation’s stimulus attracts less optimism as traders seek more details from Beijing to back the world’s biggest industrial players. The same prods Aussie and Kiwi buyers, as well as challenges the upside of the Gold and crude oil.

On a different page, German Retail Sales traced mixed inflation data to exert downside pressure on the Euro whereas USDJPY justifies the market’s hopes of witnessing a sooner end to the BoJ’s easy money policy as government and the BoJ officials mark an exit from deflation.

It should be noted that the hopes of witnessing more ETF flow and the industry players’ latest edge over the US SEC allow the BTCUSD and ETHUSD buyers hopeful but the fears of harsh regulations weigh on the Bitcoin and Ethereum prices.

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

Inflation is the key

Be it the Eurozone HICP and CPI or the US Core PCE Price Index, it’s the inflation day for markets. Should these numbers manage to show easing price pressure, the latest risk-on mood will extend and keep the US Dollar pressured while the Euro may have to register mild losses. That said, the second-tier US employment and activity data will also entertain the traders and offer a busy day ahead.

May the trading luck be with you!