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MTrading Team • 2022-04-29

Shares, gold extend recovery ahead of key US data but BTC, ETH retreat

Shares, gold extend recovery ahead of key US data but BTC, ETH retreat

Global markets keep the latest rebound intact as the US dollar retreat from a 20-year high following the mixed GDP data. Also challenging the greenback bulls can be the holidays in Japan and a cautious mood before the Fed’s preferred inflation gauge, namely the US Core Personal Consumption Expenditures (PCE) Price Index for March.

A strong start to the earnings season on Wall Street also favors the optimists amid macro news, and so does China’s firmness towards zero covid policy.

The pullback in the USD underpins gold but crude oil prices retreat on demand concerns due to the fresh coronavirus woes and monetary policy tightening.

Elsewhere, BTCUSD and ETHUSD pare recent gains but stay on the way to the first weekly gains in five and four weeks respectively.

Following is the list of major assets’ latest performances:

  • Brent oil extends the previous day’s rebound to $108.50 amid mixed clues.
  • Gold regains $1,900 level, up for the second day, while stretching the latest recovery moves.
  • USD Index snaps six-day uptrend while retreating to 103.00 from the highest levels since 2002.
  • FTSE 100 struggles for clear directions while DAX and EUROSTOXX50 rise around 2.0%.
  • Dow Jones and S&P 500 rose 1.85% and 2.47% but Nasdaq rallied over 3.0%.
  • BTCUSD and ETHUSD both lose 0.30% intraday at the latest but stays on the way to a positive week.
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Cautious optimism gains support from Japan, China

Upbeat prints of Wall Street giants’ earnings reports renewed the risk-on mood during the recent days, despite the strong yields and firmer USD. The positive sentiment not only allowed US benchmarks to post gains but also helped equities in Asia-Pacific and Europe to stay on the green side.

However, the US dollar remains mostly sidelined near the highest levels in 20 years as an off in Japan restricts the moves of the Treasury yields even as they keep flashing signs of faster monetary policy normalization. As a result, prices of shares and commodities lick their wounds but remain on the bear’s radar.

It should be noted, however, that the Russia-Ukraine crisis and covid resurgence in the world’s largest industrial player, namely China, favors the US dollar buyers ahead of the key US inflation gauge for March.

Elsewhere, BTCUSD and ETHUSD remain on the way to print the first positive week in multiple days, despite the latest pullback that snaps two-day recovery moves. The hawkish concerns surrounding cryptocurrencies could be linked to US Congressman Patrick McHenry’s push for separate legislation for such currencies, which might help the buyers. On the same line were positive developments surrounding the BTCUSD and ETHUSD, especially from El Salvador, Central Africa and Coinbase.

⏫ 🟢 Strong buy: USDJPY, GBPUSD

⏬ 🔴 Strong sell: Nasdaq, silver

⬆️ 🟢 Buy: USD Index, USDCAD, DOW JONES, S&P 500

⬇️ 🔴 Sell: DAX, FTSE 100, brent oil, gold, ETH/USD, BTC/USD, USD Index

Data keeps the table ahead of next week’s central bank meetings

Although multiple holidays in Japan and China will restrict the market moves during the days to come, monetary policies of the US Federal Reserve (Fed), Reserve Bank of Australia (RBA) and the Bank of England (BOE) will offer a busy week.

For the short-term, US Core PCE Price Index and GDP data from the old continent may entertain traders. It’s worth observing that the US Q1 2022 GDP disappointed traders the previous day but details kept buyers hopeful. Hence, today’s economics become meaningful before the next week’s key monetary policy decisions, which are likely to bolster the USD demand.

Elsewhere, legislative regulations are the biggest hurdle for crypto markets and hence any positive signs from the same, especially from the US and China, can boost BTC and ETH prices.

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