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MTrading Team • 2022-05-05

Oil, gold cheers cautious optimism but cryptos ease as USD licks Fed-led wounds

Oil, gold cheers cautious optimism but cryptos ease as USD licks Fed-led wounds

Having witnessed a heavy selling pressure the previous day, mainly led by Fed Chair Powell’s comments, the US dollar stabilizes amid mixed concerns and anxiety ahead of BOE.

Even so, the commodities and Antipodeans keep post-Fed gains as headlines concerning Russia and China, coupled with Aussie data, favored markets ahead of another raft of key data/events.

Cryptocurrencies, however, trim the biggest daily gains since March while equities print mild gains tracking the rally of Wall Street.

Following is the list of major assets’ latest performances:

  • Brent oil extends the previous day’s gains to refresh a fortnight high around $110.00.
  • Gold rises for the third consecutive day as buyers attack $1,900.
  • USD Index pares the biggest daily fall in two months near 102.90.
  • FTSE 100 print mild gains while DAX and EUROSTOXX50 add around 1.4% and 1.20% respectively.
  • Dow Jones and S&P 500 rallied 2.81% and 2.99% while Nasdaq rallied 3.19%.
  • BTCUSD and ETHUSD both remain pressured around $39,500 and $2,920.
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Fed delivered what’s promised but Powell drowned the greenback

The US Federal Reserve (Fed) delivered the widely anticipated 50 basis points (bps) of a rate hike and announced plans for Quantitative Tightening (QT) starting from June. However, Powell’s rejection of 75 bps of increase in rates seemed to have gained major attention, which in turn triggered the USD’s biggest fall in two months.

The result propelled Wall Street benchmarks and allowed AUDUSD to witness the heaviest rally since 2011, which in turn gained support from Aussie trade numbers to prevail on early Thursday.

The risk-on mood, though, faded amid the initial European session as the bloc’s readiness for an oil embargo on Russian imports and China’s covid concerns join the Sino-American tussles. The same helped oil prices to gain the extra mile and refresh the two-week high. Further, Gold prices also cheered softer USD but struggle to extend the rebound amid the pre-NFP anxiety.

Elsewhere, BTCUSD and ETHUSD fail to extend the relief rally that marked heavy daily gains, mainly due to the market’s anxiety amid mixed concerns.

⏫ 🟢 Strong buy: USDJPY, GBPUSD

⏬ 🔴 Strong sell: Nasdaq, silver, AUDUSD

⬆️ 🟢 Buy: USD Index, DOW JONES, S&P 500

⬇️ 🔴 Sell: DAX, FTSE 100, brent oil, gold, ETH/USD, BTC/USD, USD Index

US data, risk catalysts eyed but BOE tops everything

Although the BOE is less likely to offer the Fed-like moves, neither does the US second-tier data relating to jobs, global markets may extend the FOMC-inspired moves during the rest of the Thursday. The same can help commodities and equities to stay firmer while keeping cryptos under pressure.

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