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MTrading Team • 2023-03-06

Oil buyers step back on China news, cautious mood ahead of crucial data/events

Oil buyers step back on China news, cautious mood ahead of crucial data/events

After an optimistic start to March, global markets turn dicey during early Monday as traders await the key central bank decisions, as well as top-tier data from the US and China. Adding strength to the market’s cautious mood is the beginning of China’s annual National Communist Party conference.

With this, the risk-sensitive AUDUSD and NZDUSD aptly portray the mildly offbeat markets while EURUSD and USDJPY cheer the US Dollar’s failure to rebound amid softer yields. Further, USDCHF drops half a percent as Swiss CPI YoY came in firmer whereas USDCAD struggles to cheer US Dollar weakness amid crude oil’s pullback, Canada’s biggest export earner.

Elsewhere, traders of Gold and Oil struggle for clear directions after initial losses, mainly due to the market’s indecision and anxiety ahead of top-tier catalysts.

It should be observed that BTCUSD and ETHUSD remain depressed, after a two-week downtrend, as industry news keeps challenging bulls.

Following are the latest moves of the key assets:

  • Brent oil struggles to extend the two-week uptrend near the mid-$85.00s.
  • Gold remains directionless near $1,855 after posting the first weekly gain in five.
  • USD Index stays depressed near 104.40, down 0.11% intraday as we write.
  • Wall Street closed with notable gains but the equities in the Asia-Pacific region, as well as shares in Europe and the UK, trade with minor losses at the latest.
  • BTCUSD and ETHUSD both report mild losses as sellers attack the $22,400 and $1,560 levels respectively.
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A typical anxiety show!

While the key central bank events and top-tier data from the US and China are eyed for the next move and help traders to remain cautious before the release, the recent retreat in the US Treasury bond yields and China’s NPC conference strengthens the cautious mood. Further, a lack of a major catalyst during the early Monday and fresh talks of the Fed’s pivot, as well as hawkish ECB rhetoric, become an additional filter for the sentiment. As a result, the traders appear to witness mixed moves even as the US Dollar extends the previous weekly loss.

Elsewhere, the Gold price remains mildly bid while Brent Oil and Gold struggle to lure buyers after the previous week’s gains. The reason could be linked to the softer US Dollar and fears emanating from China, one of the world’s biggest commodity users.

Apart from the macro moves, the fading Brexit optimism and fears of ECB’s higher rates and looming recession fears in the bloc, as well as in the UK, are some of the extra catalysts that should limit the market’s moves and weigh on the riskier assets.

It should be noted that Silvergate’s failure and optimism for Crypto traders, emanating from China, play a mixed tune and show that the BTCUSD and ETHUSD buyers are running out of steam after a stellar run-up in late 2022.

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

Second-tier US data to entertain traders ahead of Powell’s Testimony

Eurozone Retail Sales, US Factory orders and Canadian PMI are some of the scheduled releases that can entertain intraday traders. However, the natures of these catalysts are less important and hence traders may keep portraying the pre-data/event anxiety. However, Tuesday’s Fed Chair Powell’s testimony will kick-start the data/event flow and could make the traders busy afterward. As a result, traders may witness a lackluster day before crucial catalysts.

May the trading luck be with you!