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MTrading Team • 2024-03-26

EURUSD seesaws around mid-1.0800s ahead of US Durable Goods Orders, Consumer Confidence

EURUSD seesaws around mid-1.0800s ahead of US Durable Goods Orders, Consumer Confidence

Market sentiment remains cautious as traders await this week’s key US data/events early Tuesday. Also challenging the risk appetite are the recently escalating geopolitical woes surrounding the Middle East, Russia and China.

Even so, the US Dollar remains pressured amid a pullback in the yields, which in turn allow the major currencies to defend the week-start rebound. It should be noted, however, that the commodities mark mixed performance as Gold and crude oil retreat.

Elsewhere, EURUSD struggles to defend the previous day’s rebound as most of the European Central Bank (ECB) officials suggest sooner rate cuts while USDJPY also treads water on mixed concerns about the Bank of Japan (BoJ) and unimpressive Japan data. Further, GBPUSD edges higher while cheering Monday’s hawkish comments from a Bank of England (BoE) policymaker but the AUDUSD and the NZDUSD stay defensive.

On a different page, BTCUSD and ETHUSD print a three-day uptrend amid a major inflow of funds into the crypto market through the spot ETF approvals.

Following are the latest moves of the key assets:

  • Brent oil pares the biggest daily gains in a week with mild losses around $86.60 by the press time.
  • Gold price remains mildly bid, sluggish of late, near $2,175 as we write.
  • USD Index stays defensive around 104.20 after retreating from a five-week high the previous day.
  • Wall Street closed with minor losses and the Asia-Pacific stocks also edged lower. Further, the shares in Europe and the UK remain indecisive during the initial hour.
  • BTCUSD and ETHUSD rise for the third consecutive day to around $70,700 and $3,650 at the latest.
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US Dollar stays depressed ahead of key data…

The US Dollar Index (DXY) remains pressured after reversing from a six-week high while tracing a pullback in the Treasury bond yields the previous day. In doing so, the greenback’s gauge versus the six major currencies consolidates last week’s gains amid mixed data and unimpressive comments from the Fed officials. However, the cautious mood ahead of today’s key statistics and the geopolitical woes put a floor under the US Dollar.

Monday’s upbeat prints of the Chicago Fed National Activity Index and hawkish comments from Atlanta Fed President Raphael Bostic failed to inspire the US Dollar bulls. However, the risk appetite soured during the US session and challenged the greenback sellers afterward.

Additionally, the downbeat prints of the US Housing Starts, Building Permits and Dallas Fed Manufacturing Index also played their role in weighing on the US Dollar. Furthermore, Federal Reserve Governor Lisa Cook’s repetitive comments suggesting a delay in the Fed rate cuts also stopped the greenback from extending last week’s run-up the previous day.

Furthermore, a slew of risk-negative headlines challenged the US Dollar sellers late Monday. That said, Houthis hit China-run tanker shipping Russian oil per the US central command even as Russia and China both have agreements with the military group operating in the Red Sea. Further, Russian President Vladimir Putin alleged radical Islamists for the weekend attack in Moscow that was considered the biggest blow to the nation in two decades. Additionally, AP news reported a Water cannon assault by the Chinese Coast Guard on the Filipino navy crew. On the same line, the New York Federal Reserve research paper anticipated an upward push to the US inflation in case of China’s credit-fueled boom in manufacturing activity, which in turn defends the Federal Reserve officials’ push for a delay in the rate cuts and put a floor under the US Dollar.

While the US Dollar eased, the Gold price managed to snap a two-day losing streak on Monday whereas Crude oil rallied heavily amid fears of supply crunch. Apart from the aforementioned geopolitical woes, news that Russia ordered companies to cut oil production to meet the OPEC+ output cut agreement’s target offered additional strength to the energy prices, especially amid the US Dollar’s pullback.

On a different page, New Zealand’s Foreign Minister Winston Peters accused China of hacking parliament and renewed the geopolitical woes but the softer US Dollar and cautious optimism in the Asia-Pacific zone favored the NZDUSD pair to extend Monday’s corrective bounce from a four-month low. Further, Australia’s monthly Westpac Consumer Confidence Index dropped to -1.8% for March from 6.2% reported in February, which in turn stops the AUDUSD pair from extending the week-start rebound despite the softer US Dollar.

It should be noted that ECB’s Panetta and Lane both signaled nearness to the rate cuts and challenged the EURUSD buyers amid mixed Eurozone data. On the other hand, BoE’s Mann repeated his favor for a delayed rate cut and defended the GBPUSD bulls despite looming concerns about the UK’s economic strength. Earlier in the day, Germany’s GfK Consumer Confidence for April improved and allowed the Euro pair to edge higher. That said, no change in Japan’s Corporate Service Price Index for February and sluggish yields restrict USDJPY moves.

  • Strong buy: USDCAD, USDJPY
  • Strong sell: Crude Oil, US Dollar, GBPUSD
  • Buy: BTCUSD, ETHUSD, Nasdaq, Gold

US data in the spotlight…

Looking ahead, US Durable Goods Orders and CB Consumer Confidence will be crucial for the traders to watch as firmer prints of data could bolster the hawkish Fed concerns and allow the US Dollar to recover. However, the market’s peace with the odds favoring the Fed’s June rate cut can challenge the Greenback buyers unless there is a drastic positive change in the stated data/events.

May the trading luck be with you!