Risk-on mood propels AUDUSD, weighs on US Dollar ahead of top-tier data

Market sentiment remains firmer during early Tuesday, extending the week-start optimism, as policymakers manage to convince traders of their capacity to avoid another financial crisis via multiple measures and policies. Adding strength to the risk-on mood could be the Fed policymakers’ cautious remarks and softer US data, which in turn suggest nearness to the policy pivot.

With this, the risk-barometer AUDUSD prints the biggest daily gains, so far, in more than a week even as the Aussie Retail Sales growth came in softer than expected and prior.

That said, the US Dollar bears the burden of the market’s optimism amid less hawkish Fed remarks, downbeat US statistics and the US Treasury bond yields’ failure to keep the previous day’s rebound.

With this, the Gold price struggle for clear directions as XAUUSD bears poke short-term key support after a two-day downtrend whereas the Oil price grinds higher after rising the most since early November 2022.

Elsewhere, the Asia-Pacific equities trade mixed as headlines surrounding China appears less optimistic while S&P 500 Futures print mild gains.

Further, BTCUSD and ETHUSD also struggle for clear directions amid fears of more supplies and regulatory concerns.

Following are the latest moves of the key assets:

• Brent oil prints mild gains near $78.40 after rising the most in nearly five months.
• Gold drops for the third consecutive day to $1,952, down 0.20% intraday as we write.
• USD Index prints two-day losing streak around 102.55 by the press time.
• Wall Street closed mixed and so did equities in the Asia-Pacific region. However, shares in Europe and the UK post minor gains.
• BTCUSD and ETHUSD struggle around $27,000 and $1,730 respectively.

Risk-on or month-end consolidation?

Although the global markets are upbeat, traders do sense something fishy as the policymakers need to reiterate their capacities to defend the banking sector while suggesting challenges ahead. Additionally, the hopes of witnessing an easy money policy also remain on the shelf as the inflation fears haven’t abated. As a result, the latest firmer sentiment could be termed as the month-end positioning ahead of the key inflation data from Australia, the US, Europe and Japan.

Additionally challenging the optimists are the headlines suggesting more geopolitical tension surrounding Russia, China and North Korea.

With this, the AUDUSD pair’s upside appears elusive while the EURUSD bears do flex their muscles and poke short-term key resistance. Further, the USDJPY rebound fails to confirm the falling wedge bullish chart pattern and check the risk-on mood.

Commodities grind higher but lack upside momentum after a volatile start to the likely sluggish week. As a result, the latest rebound of Gold and Crude Oil remains doubtful.

ETHUSD positions itself of more supplies and prints mild gains but BTCUSD appears slipping off the bull’s radar.

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

US CB Consumer Confidence eyed

Moving on, US Consumer Confidence data will be watched closely ahead of the inflation numbers from the top-tier economies mentioned above. Should the US data offer a positive surprise, the greenback could pare the latest losses.

May the trading luck be with you!