Gold recovers on US Dollar’s pullback before mid-tier data

Market sentiment improves on early Friday, allowing the US Dollar bulls to take a breather and trigger the much-awaited Gold price rebound. The latest consolidation could be linked to the concerns that the policymakers appear near to a deal to avoid the US default. Adding strength to the corrective bounce are the mixed comments from the Fed policymakers despite upbeat US data.

With this, the US Treasury bond yields retreat and allow the market sentiment to improve a bit, which in turn allows the Gold to rebound from a two-month low. It’s worth noting that Brent Oil price pares the biggest daily loss in three weeks.

That said, the EURUSD remains mildly bid while GBPUSD struggles to cheer mixed UK Retail Sales by staying firmer above the 100-DMA support. Further, USDJPY drops the most among the G10 currency pairs as downbeat yields join hawkish concerns about the BoJ.

It should be noted, however, that the BTCUSD bears the burden of the large liquidation of miners’ positions but ETHUSD grinds higher after bouncing off a fortnight low the previous day.

Following are the latest moves of the key assets:

• Brent oil prints mild gains near $76.30 to pare the biggest daily loss in three weeks.
• Gold price rises for the first time in three days as buyers poke $1,958 as it bounces off two-month low.
• USD Index snaps the fourth consecutive daily gain around 104.00 by the press time.
• Wall Street closed mixed and so did the Asia-Pacific shares. However, equities in Europe and the UK are mildly offered during the initial hour.
• BTCUSD and ETHUSD trade mixed as the former print minor losses around $26,500 but the latter rises to $1,815 as we write.

Cautious optimism or consolidation ahead of data?

While most on the trading lines highlight the policymakers’ hopes of avoiding the US default as the key catalyst behind the latest improvement in market sentiment, others describe it as paring back of weekly moves ahead of a slew of US data. Hence, traders are just covering their weekly positions ahead of the US statistics that are likely to renew the hawkish Fed bias that eased the previous day.

On a different page, UK Retail Sales improve but couldn’t satisfy the upbeat market expectations. Further, Australia Retail Sales were downbeat but helped the Aussie pair to remain firmer, mostly due to the softer USD. The same allowed NZDUSD to grind higher even as RBNZ officials hint at easy rates ahead.

Gold is on the cusp of declining further but appears holding the gate ahead of the US data and debt ceiling deal. Further, Crude Oil prints mild gains amid hopes of further energy price rise as Russia expects Brent Oil to rise to $80.00.

On the other hand, Bitcoin miners’ liquidation joins the fears of a firmer USD after the data and US debt ceiling extension whereas ETHUSD prepares for a big move in the weekend.

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

Too many data, events before Monday

Be it the US Durable Goods Orders or the Fed’s favorite inflation gauge, not to forget the looming agreement to avoid the US default, multiple catalysts are lined up to offer an active Friday and/or big gaps on Monday.

May the trading luck be with you!