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MTrading Team • 2023-09-08

EURUSD rebounds from multi-day low as markets prepare for next week’s ECB

EURUSD rebounds from multi-day low as markets prepare for next week’s ECB

Financial markets consolidate the weekly moves on early Friday as traders lack major catalysts, as well as are preparing for the next week’s top-tier data/events. The positioning also takes clues from mixed comments of the Federal Reserve (Fed) officials and China’s efforts to defend the Yuan, as well as convince markets of their ability to witness economic recovery.

With this, the US Dollar and Treasury bond yields retreat while the Asia-Pacific shares edge higher. The cautious optimism also allows commodities and Antipodeans to print mild gains. However, Oil price prints mild losses amid doubts about future demand from China.

NZDUSD prints the biggest daily gains among the G10 currency pairs while AUDUSD occupies the second place.

It should be noted that Gold Price extends the previous day’s recovery while Silver prints the first daily gain in eight days, positing mild gains of late.

Elsewhere, BTCUSD and ETHUSD struggle to extend the previous day’s recovery moves amid mixed concerns about future regulatory updates.

Following are the latest moves of the key assets:

  • Brent oil remains pressured around $89.80 after reversing from yearly high the previous day.
  • Gold price rises to $1,926 while extending the previous day’s rebound from the 200-DMA.
  • USD Index eases from the highest level in six months, down 0.22% intraday to 104.80 by the press time.
  • Wall Street closed mixed but the Asia-Pacific stocks edged higher by the press time. That said, equities in Europe and the UK print minor gains by the press time.
  • BTCUSD remains indecisive near $26,200 while ETHUSD seesaws around $1,650 at the latest.
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A quiet Friday!

As Chinese media tried to infuse optimism and Fed officials tried defending their “higher for longer” rate bias, traders witnessed a mixed mood during early-day trading. Even so, a light calendar, apart from softer Japan Q2 GDP, allowed traders to consolidate the weekly moves while preparing for next week’s ECB monetary policy meeting, UK jobs report and the US inflation data.

It’s worth noting that the economic fears surrounding major nations, ex-US, seem to prod the US Dollar sellers despite the Greenback’s retreat from the multi-day high. Also, the Gold Price recovery appears elusive due to the looming concerns about China and mixed geopolitical chatters on Taiwan and Russia matters.

Elsewhere, Crude Oil pares the gains amid hopes that the supply cuts have already fuelled the prices much and a lack of demand from China could challenge the energy optimists.

Talking about the cryptos, the options market traders have been defending their bullish bias about Bitcoin but a move by the US authorities prods the crypto optimists. Alternatively, a denial of the major bills that previously flagged fears of harsh regulations defended the BTCUSD and ETHUSD traders.

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

Canada employment, mid-tier US details eyed

Although the economic calendar is mostly quiet for Friday, the monthly prints of Canada’s August month employment readings and the US Wholesale Inventories for July will decorate the calendar. While the Bank of Canada’s (BoC) inaction and Governor Tiff Macklem’s readiness to act keeps the Loonie buyers hopeful, a broadly firmer US Dollar challenges the Canadian Dollar (CAD) buyers. Hence, the Canadian jobs report needs to post extremely strong numbers while the US data should ease to exert downside pressure on the USDCAD pair. Apart from that, a lack of surprise from Germany and the market’s preparation for next week’s ECB decision may allow the EURUSD to rebound.

May the trading luck be with you!