Full markets fail to overcome cautious mood, US dollar struggles

Trade the news on September 20 2022

Global markets turn dicey even as the British and Japanese traders returned from a long weekend. The reason could well be linked to the anxiety ahead of the key central bank announcements that started with the PBOC’s inaction.

US Dollar struggles for clear directions, printing mild losses at the latest, as downbeat inflation expectations and recently softer US housing data tease sellers. The same, however, failed to impress gold buyers. Even so, crude oil remains firmer on supply-crunch fears.

NZDUSD and USDJPY portray the USD strength while EURUSD and GBPUSD cheer the greenback’s weakness.

Elsewhere, crypto bears take a breather as regulatory concerns joined optimism surrounding Ethereum’s Merge.

Following are the latest moves of the key assets:

  • Brent oil reverses the previous day’s losses and rises 1.0% as bulls attack $93.00.
  • Gold remains sluggish at around $1,680 while snapping two-day rebound from the yearly low.
  • USD Index stays indecisive near 109.60, pausing two-day downtrend.
  • DAX and FTSE both print mild gains but the Eurostoxx is down 0.11% intraday at the latest.
  • Wall Street stretched Friday’s gains with all the three benchmarks gaining nearly 0.65-70% intraday.
  • BTCUSD loses nearly 1.4% to $19,300 while ETHUSD drops 1.8% to $1,350.

Bulls and bears jostle amid mixed clues

The downbeat US housing numbers joined the already priced-in 0.75% rate hike calls that challenged the US dollar bulls. However, economic fears emanating from China and Europe, as well as looming US recession chatters, keep US dollar bulls hopeful.

It should be noted, however, that the AUDUSD portrays the market’s inaction, backed by the mixed RBA minutes, whereas the NZDUSD shows disappointment from the PBOC’s inaction. USDJPY traces firmer yields and stimulus hopes to remain firmer but EURUSD and GBPUSD print gains amid hopes that the policymakers will be able to tackle the energy crisis.

Gold struggles for clear directions but Brent oil rises 1.0% as the Iran deal seems far away while the OPEC+ group isn’t ready for losing their belts much.

Talks that the Ethereum traders are clustered in the US join fears that the SEC will take measures to tame cryptos weigh on the BTCUSD and the ETHUSD moves.

⏫ 🟢 Strong buy: AUDUSD

⏬ 🔴 Strong sell: ETHUSD

⬆️ 🟢 Buy: USD Index, USDCAD, Nasdaq, USDJPY

⬇️ 🔴 Sell: DAX, FTSE 100, gold, BTCUSD

Nothing major to watch ahead of the Fed

Some second-tier data and inflation expectations numbers can tease US dollar sellers ahead of Wednesday’s FOMC. However, the markets are likely to remain sluggish and can keep the major currency pairs inside the latest trading range.

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