USDJPY entertains momentum traders amid sluggish session

Markets seem to cheer holiday mood earlier this time, especially after a volatile week, as major currency pairs and commodities stay mildly moved on Monday.

Even so, the cautious optimism weighs on the US Dollar and helped AUDUSD and USDJPY to lead the gainers versus the greenback. The yen pair has an additional reason, in the form of hawkish BOJ concerns, while China-linked headlines propel AUDUSD prices.

Elsewhere, gold stays indecisive after an upbeat start but crude oil remains firmer amid expectations of more demand from Beijing and the US both.

Cryptocurrencies, however, couldn’t benefit from the softer USD amid looming regulatory concerns over the once-booming assets.

Following are the latest moves of the key assets:

• Brent oil remains depressed but the WTI counterpart stays firmer mixed clues.
• Gold stays pressured around $1,790 after two-day downtrend.
• USD Index struggles to defend the previous day’s rebound, down 0.40% intraday near 104.40.
• Wall Street closed negative but the stocks in Europe and the UK print mild gains of late.
• BTCUSD and ETHUSD both print mild losses after a positive weekly close.

A slower start to the last active week of 2022

Even if the one last shot before Christmas is pending, traders act as if 2022 is almost over. The reason could be linked to mixed headlines surrounding sentiment and a light calendar, not to forget the practice of waiting on how the markets react to the bid events that happened the last week.

However, talks that the Japanese government may help the Bank of Japan (BOJ) overcome its loose monetary policy when the Governor retires seemed to have weighed on the USDJPY. On the other hand, the chatter surrounding China’s big stimulus and a meeting between the officials from Canberra and Beijing after a long time favored the AUDUSD bulls.

Gold price, however, portrays the market’s inaction while oil regains upside momentum. Further, equities grind higher but the BTCUSD and ETHUSD are from recovery and suggest more pessimism than initially feared.

It should be observed that fears of recession, global regulation in cryptos and indecision over China’s economic transition seem to act as trading filters amid a lack of major data/events.

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

Risk catalysts eyed

Given the light calendar and mixed signals from the news, multiple speeches from the central banks and inflation data will be in focus moving on. For today, both of them appear to be absent, which in turn can add strength to the Monday Blues.

May the trading luck be with you!