EURUSD retreats from multi-month high amid market’s consolidation

The market consolidate the weekly move against the US Dollar while waiting for some more clues to confirm the nearness to the Fed’s policy pivot that drowned the greenback during earlier days. Risk appetite appears slightly downbeat amid mixed headlines surrounding China and a corrective bounce in yields.

With this, the USD rebounds from a 15-month low and probes the EURUSD bulls at the highest level since February 2022. Apart from the cautious mood and the corrective bounce in the USD, the downbeat prints of Eurozone Core Inflation for June also stopped the Euro bulls at the multi-month high.

Elsewhere, AUDUSD and NZDUSD drop the most versus the US Dollar among the G10 currencies as the IMF flagged fears of China’s slower economic recovery and pushed for more stimulus. Furthermore, USDJPY recovers from its monthly low while tracing yields and downbeat prints of second-tier Japan data.

Gold reverses from the highest level in a month and so does the Crude Oil price as energy demand forecasts from the US renew fears of an economic slowdown.

On a different page, ETHUSD pares the biggest daily gains in four months while BTCUSD eases from a 13-month high amid upbeat headlines surrounding the cryptocurrency markets.

Following are the latest moves of the key assets:

• Brent oil retreats from monthly high, down 0.2% intraday near $81.20 at the latest.
• Gold price also eases at the highest level in a month, mildly offered around $1,960 as we write.
• USD Index rebounds from the lowest level since February 2022 but fails to gain upside momentum near 99.80 by the press time.
• Wall Street closed with minor gains and fuelled the Asia-Pacific shares while equities in Europe and UK are trading mixed by the press time.
• BTCUSD and ETHUSD print minor losses to around $31,350 and $2,000 as we write.

Cautious mood allows US Dollar to lick its wounds at 15-month low

US Dollar’s bloodbath stalls after consecutive seven days of south run that dragged the greenback to the fresh multi-month low. That said, concerns that easing inflation pressure will push the Fed towards the early exit of restrictive monetary policy drowned the US Dollar during the week, preparing it for the late July Fed rate hike. However, the cautious mood ahead of today’s University of Michigan Consumer Confidence Index and inflation expectation numbers joins the China-linked fears to underpin the USD rebound. Apart from that, the pause in the US Treasury bond yield and hawkish comments from Fed Governor Waller also played their roles in activating the greenback’s rebound.

On a different page, Ripple’s partial victory against the US SEC boosted investor confidence in the crypto markets and propelled the BTCUSD and ETHUSD the previous day. Adding strength to the optimism were headlines that the European ETF has clear initial hurdles and is set for more inflows into the crypto market.

• Strong buy: USDCAD
• Strong sell: ETHUSD, GBPUSD, Gold
• Buy: USD Index, Nasdaq, USDJPY
• Sell: DAX, FTSE 100, BTCUSD, AUDUSD, EURUSD

Second-tier EU, US data/events eyed

Having witnessed the softer prints of the final EU inflation data for June, market players will cautiously examine the European Commission’s economic forecasts for clear directions, especially for the EURUSD. Following that, the US consumer-centric data will be eyed for getting the one last shot before bracing for the late July FOMC.

Overall, a cautious mood may allow the US Dollar to pare some of its latest losses but the recovery remains elusive unless the scheduled data push back hopes of no rate hikes past July.

May the trading luck be with you!