USDJPY consolidates weekly loss as US Dollar, yields rebound

Global markets take a breather after the previous day’s cautious optimism that drowned US Dollar amid downbeat US data and receding hawkish Fed bets. Adding strength to that were headlines from China and the UK that they can avoid recession easily but the news from Australia and Europe appears to challenge the optimists as the economic slowdown appears imminent in those countries/regions.

That said, the yields regain upside momentum as traders rush towards the traditional havens like JPY, Gold and US Government bonds during uncertainty. The same propels the USDJPY pair as BoJ officials push back calls to tighten monetary policies.

Elsewhere, AUDUSD and NZDUSD struggle to cheer the mildly positive sentiment on downbeat China inflation data whereas Gold price lacks clear direction after rising the most in many weeks. That said, crude oil also recovers amid fears of a supply crunch.

It should be noted that the major currency pairs portray the US Dollar’s rebound, after falling the most in five weeks, but USDCAD stays downbeat on hawkish BoC bias and due to the pre-Canadian employment report consolidation.

Talking about the cryptos, BTCUSD and ETHUSD drop as the US SEC keeps being tough on industry players after the FTX fallout.

Following are the latest moves of the key assets:

• Brent oil regains $76.00 after refreshing weekly low the previous day.
• Gold price stays directionless around $1,965 following a heavy rebound.
• USD Index prints mild gains at two-week low, around 103.45 by the press time.
• Wall Street closed with mild gains but the Asia-Pacific shares trade mixed. That said, the equities in the UK and Europe edge lower as we write.
• BTCUSD and ETHUSD print mild losses near $26,500 and $1,840 respectively at the latest.

Traders brace for blockbuster week…

Although the US data triggered market optimism the previous day and the following updates from IMF, Australia and Europe were mixed to recall the challenge to the sentiment, the market’s overall performance remains dicey as hopes of economic transition contrasts with the expectations of higher rates.

Even so, the rush towards Gold and bonds can be spotted in recent days while Antipodeans cheer hawkish central moves. That said, downbeat China inflation and expectations of no recession in the UK, as well as in China, keep the traders hopeful of witnessing hawkish central bank moves in the next week, which in turn allows the Euro and the US Dollar to prepare for the same.

On a different page, Binance’s suspension of USD deposits and a significant increase in the US SEC’s law enforcement actions against the cryptocurrency-linked moves weigh on the BTCUSD and ETHUSD prices.

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

Canada jobs report, risk catalysts are the key…

While the economic calendar is mostly silent, Canada’s employment data may entertain FX traders. The same, if matching upbeat forecasts, can exert more downside pressure on the USDCAD pair as it stays near the lowest level in a month. However, major attention will be given to the recession woes and the clues for next week’s US CPI, FOMC and ECB monetary policy meeting.

May the trading luck be with you!