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MTrading Team • 2023-09-29

EURUSD positions for Eurozone, Fed inflation amid US government shutdown woes

EURUSD positions for Eurozone, Fed inflation amid US government shutdown woes

The risk appetite improves a bit on Friday as traders consolidate the weekly moves amid slightly positive signals from the US and China. Adding to the cautious optimism could be the mixed US data and the mixed Fed talks, challenging the policy hawks and the US Dollar.

With this, the US Dollar Index (DXY) traces the yields to retreat from the yearly high and allows the Gold Price to post the much-needed corrective bounce. With this, the Greenback ignores softer-than-expected German inflation clues and fears of the Eurozone recession to underpin the EURUSD recovery from the lowest level since December 2022.

Further, GBPUSD and USDJPY also portray the US Dollar’s corrective pullback while the Crude oil reverses the previous day’s U-turn from the year’s high. That said, Wall Street closed in the positive territory and the Asia-Pacific equities also edged higher.

NZDUSD rallied the most as upbeat ANZ confidence data joined China news while the AUDUSD came in second in the line of the winners against the US Dollar. However, USDCNY remains lackluster whereas the USDCAD and USDCAD print mild gains versus the Greenback.

On a different page, BTCUSD grinds higher after rising the most in two weeks while the ETHUSD remains mildly bid after posting the biggest daily run-up in a month as markets prepare for possible ETF announcements.

Following are the latest moves of the key assets:

  • Brent oil stays defensive around $94.00, challenging the previous day’s U-turn from yearly high.
  • Gold price recovers from 6.5-month low, printing mild gains around $1,875 by the press time.
  • USD Index extends the previous day’s retreat from the 10-month high to 105.70 as we write.
  • Wall Street closed with minor gains and the Asia-Pacific stocks also edged higher. With this, equities in Europe and the UK print mild gains at the latest.
  • BTCUSD and ETHUSD trade firmer to around $27,200 and $1,690 as we write.
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US, China lift sentiment ahead of key data, events

Concerns about the Chinese diplomats’ US visit and Beijing’s other attempt to revive the housing market at home lifted the sentiment on early Friday. On the same line could be the mostly mixed US data about productivity and employment. Further, Fed’s Goolsbee also appeared to lack hawkish bias and triggered the much-needed US Dollar pullback from the yearly high.

With this, the softer German inflation numbers and the economic woes surrounding the Eurozone failed to tame the EURUSD buyers. It’s worth noting that the fears of the UK’s recession, however, test the GBPUSD recovery of late.

Elsewhere, a fresh run-up in the Oil price allows the USDCAD to extend the latest retreat from the multi-day high whereas Gold Price stays defensive at the 6.5-month low.

It should be noted that optimism about the alleged ETF rollouts on Monday supersede fears about the US SEC-inflicted hardships for the crypto industry and the options market woes to keep the BTCUSD and ETHUSD in recovery mode.

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

Eurozone, US inflation and the US government shutdown eyed

A slew of Eurozone and the US data surrounding inflation will entertain the market players on Friday. Also important to watch will be the US policymakers’ attempts to avoid the government shutdown on the last working day of the week. Should the officials fail to lift the debt ceiling the government shutdown will be active and will trigger volatility in the US Dollar and the Gold Price. That said, a deal on avoiding the shutdown may improve the market’s mood and can extend the latest US Dollar pullback.

May the trading luck be with you!