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MTrading Team • 2023-05-30

Oil sellers return to the table amid upbeat US Dollar, challenge to risk

Oil sellers return to the table amid upbeat US Dollar, challenge to risk

The full market’s return fails to cheer the US deal on avoiding default and kept the US Dollar on the front foot. The reason could be linked to hawkish Fed bets, as well as a bumpy road to the US President’s table for a debt ceiling agreement. Also underpinning the greenback’s run-up could be the challenges to risk appetite from China, Russia and the fragile banking sector.

The US Dollar’s run-up joins softer yearly Swiss GDP and softer sentiment data to make the USDCHF pair the leading runner among the G10 currency pairs. EURUSD occupies the second place while justifying the USD strength among top pairs whereas commodities and Antipodeans also drop as markets favor the US Dollar.

That said, Gold price reverse the previous two-day recovery while dropping to the lowest in 10 weeks whereas Crude Oil also extends the week-start losses below $77.00.

Cryptocurrencies edge higher after reversing from a three-week top the previous day as BTCUSD and ETHUSD traders hope for better days for the market ahead.

Following are the latest moves of the key assets:

  • Brent oil drops for the second consecutive day, down 0.80% intraday near $76.60 by the press time.
  • Gold price prints the biggest daily loss in six weeks around $1,937, down 1.67% intraday at the latest.
  • USD Index pierces a multi-day-old key resistance to refresh two-month high of around 104.50 as we write.
  • Holidays in Wall Street allowed Asia-Pacific shares to trade mixed but equities in the UK and Europe remains mildly bid by the press time.
  • BTCUSD and ETHUSD print mild gains around $27,750 and $1,900 at the latest.
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US Dollar is the King…

Despite the mixed sentiment in the market, the traders show their affection towards the US Dollar, especially amid the hawkish Federal Reserve concerns. With this, the USD Index pierces a multi-day-old key resistance to refresh a two-month high. The same weighs on most pairs, commodities and Antipodeans as traders from the key economies return after a long weekend.

Even so, fears of US default and anxiety ahead of this week’s top-tier data/events prod the greenback buyers, as well as other financial assets.

That said, Aussie housing numbers fail to recall the AUDUSD bulls while USDJPY ignores mostly downbeat yields and upbeat Japan employment report.

Elsewhere, hopes of more Oil supplies from Iran join the firmer US Dollar to drown the energy prices while Gold drops the most in six weeks while crossing the two-day recovery.

However, optimism on the crypto front defends BTCUSD and ETHUSD traders amid expectations of softer regulations and broad economic recovery.

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

Too much data amid full markets

After Monday’s mostly empty economic calendar, the data line is thick on Tuesday with the US and Eurozone sentiment numbers leading the queue. Also important are the inflation figures from Spain. Above all, risk catalysts and the traders’ reaction to the same will be crucial to watch for clear directions.

May the trading luck be with you!