EURUSD edges higher as traders await EU/US data, Fed Chair Powell’s Testimony

Market players brace for this week’s top-tier data/events while extending the previous move against the US Dollar in a slow motion during early Wednesday. In doing so, the traders seem to prepare for the US Dollar’s corrective bounce while expecting hawkish Fed signals and upbeat US employment clues.

The US Dollar’s gauge versus six major currencies, namely the US Dollar Index (DXY), remains pressured at the lowest level in more than a week, down for the fourth consecutive day, as the recent US data has been challenging the delayed Fed rate cut bias.

Amid these plays, the major currency pairs register mild gains versus the Greenback while commodities grind higher. That said, USDJPY and AUDUSD are the biggest gainers against the US Dollar while Crude Oil snapped a two-day losing streak. It’s worth noting that the Gold price lacks upside momentum after refreshing the yearly high the previous day, challenging a four-day uptrend of late.

Elsewhere, BTCUSD and ETHUSD pick up bids to reverse the previous day’s retreat from the multi-year high as crypto traders fear challenges for bulls ahead of the Bitcoin halving event, as well as due to the heavy liquidation of positions.

Following are the latest moves of the key assets:

• Brent oil prints mild gains around $83.00 to snap a previous two-day losing streak.
• Gold price seesaws at the yearly high while testing a five-day uptrend, indecisive near $2,130 by the press time.
• USD Index stays pressured for the fourth consecutive day, down 0.10% intraday near 103.60 as we write.
• Wall Street closed in the red but the Asia-Pacific stocks grind higher. Further, the shares in Europe and the UK remain dicey during the initial hour.
• BTCUSD and ETHUSD both seesaw near the multi-month high, close to $66,100 and $3,760 at the latest.

EURUSD bulls prepare for a big day…

Although Tuesday’s Doji candlestick challenged the EURUSD pair’s previous run-up, the US Dollar’s inability to recover and downbeat Treasury bond yields keep the Euro buyers hopeful ahead of today’s EU Retail Sales, US ADP Employment Change and Fed Chair Jerome Powell’s Testimony.

It should be noted that the previous day’s downbeat prints of US ISM Services PMI and Factory Orders joined the hawkish comments from the European Central Bank (ECB) Officials to underpin the bullish bias about the major currency pair. However, an absence of risk-on mood and fears of a delay in the rate cuts from the key central banks test the EURUSD upside.

Elsewhere, softer Treasury bond yields join the hawkish concerns about the Bank of Japan (BoJ), as well as comparatively better Japan data, to weigh on the USDJPY. Further, AUDUSD cheers the US Dollar’s weakness and hopes for more stimulus from China while ignoring fears of a pause in the Reserve Bank of Australia’s (RBA) rate hikes.

It should be noted that the GBPUSD also suffers from the buyer’s hesitance as the UK fundamentals aren’t brighter compared to the US and EU ones. On the same line could be the USDCAD as the Bank of Canada (BoC) is likely to announce a dovish halt today.

On a different page, Gold price stays on the bull’s radar after crossing the $2,090 upside hurdle whereas Crude oil struggles to convince buyers amid mixed news surrounding the supply-demand matrix.

Talking about the cryptos, BTCUSD rose to an all-time high and the ETHUSD also printed the highest level since early 2022 as traders expect more fund inflow amid spot ETF approvals. However, the market’s consolidation allowed traders to cash out a bit before regaining the upside momentum earlier in the day.

• Strong buy: USDCAD, USDJPY
• Strong sell: Crude Oil, US Dollar, GBPUSD
• Buy: BTCUSD, ETHUSD, Nasdaq, Gold
• Sell: DAX, FTSE 100, BTCUSD, AUDUSD, EURUSD

Multiple catalysts to watch for clear directions…

While Fed Chair Powell’s Testimony and US ADP Employment Change are today’s top-tier data, EU Retail Sales and BoC monetary policy announcements will also entertain the momentum traders. Apart from that, a slew of speeches from the second-tier central bank officials from the US and Europe will also be worth watching as traders recently brace for hawkish stands of the key central banks. Given the likely hawkish comments from Powell and upbeat US job conditions, the US Dollar is expected to pare recent losses and can challenge the latest upside of the riskier assets like commodities and Antipodeans.

May the trading luck be with you!