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MTrading Team • 2022-07-22

US dollar braces for the first weekly loss in four ahead of the FOMC

US dollar braces for the first weekly loss in four ahead of the FOMC

Market sentiment improved after the European Central Bank (ECB) drowned the US Treasury yields. The risk-on mood appears to stay present on Friday even as Aussie PMIs and the UK Retail Sales failed to provide any clear optimism.

With this, the US dollar consolidates the weekly loss in four as traders await PMI for Eurozone, the UK and the US. It should be noted that the economic fears drowned EURUSD but the GBPUSD remains hesitant in welcoming the bears.

Prices of gold fade the previous day’s corrective pullback from the yearly low and so do those of crude oil amid fears of more supplies and easing tussles between Russia and Ukraine moving forward.

Cryptocurrencies struggle for clear directions even as BTCUSD and the ETHUSD head for the weekly gains.

Following are the latest moves of the key assets:

  • Brent oil takes offers to refresh intraday low near $104.00, down 0.50% intraday.
  • Gold drops 0.20% intraday to $1,715 but braces for the first weekly gain near the yearly low.
  • USD Index rises 0.70% to regain 108.00 as it licks wounds after the first weekly loss in four.
  • FTSE 100, STOXX50 and DAX are all printing mild gains after an upbeat start to the day.
  • Wall Street closed with mild gains but the bulls retreated by the end of the day.
  • BTCUSD declines 0.1% intraday as it defends $23,000 mark while ETHUSD rises around 1.50% intraday as buyers approach $1600.
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Jittery markets ahead of next week’s Fed

Risk appetite remains mildly positive as bears take a breather ahead of the key PMIs. The same allows the US dollar to pare recent losses but the Euro remains pressured as traders fear more economic hardships for the old continent. Italy’s political crisis could be considered an extra burden for the Eurozone.

Elsewhere, global oil producers appear in no rush to respect the US-led push for more output but the fears of a decline in the energy demand, due to recession fears, appear to keep the black gold on a dicey floor.

USDJPY eyes the first weekly loss since late May while AUDUSD and the NZDUSD prepare to welcome the buyers. Furthermore, gold’s bounces off yearly low fades and the USDCAD is also bracing for the biggest weekly loss since March 14.

BTCUSD and ETHUSD are on their way to weekly gains even if the daily gains are minimal. However, doubts over the future of the once favorite currencies, mainly due to the looming regulations and fears of economic slowdown, fail to convince the bulls.

⏫ 🟢 Strong buy: USDCAD

⏬ 🔴 Strong sell: Nasdaq, silver, ETHUSD

⬆️ 🟢 Buy: USD Index, USDJPY

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

PMIs in focus but Fed is the key

Although today’s PMIs for July are likely to portray downbeat figures and can challenge the central bank’s aggression, the ECB’s 0.50% rate hike teases the Fed to front-load the rates and battle the inflation woes. Also challenging the Fed hawks are the recent data that flashed mixed numbers. Hence, the risk-aversion wave can continue fueling the US dollar and weigh on the gold, if not this then the next.

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