Slightly positive sentiment, US Dollar retreat challenge Crude Oil bears

Traders prepare for the US Durable Goods Orders with a slightly positive risk profile early Wednesday, mainly due to the upbeat earnings from tech giants and US President Biden’s readiness to avoid government default at any cost.

US Dollar pares the previous heavy gains while the US Treasury bond yields pause the latest downside. Further, Wall Street closed in the red but US stock futures printed mild gains while shares in the Asia-Pacific shares grind lower.

Commodities like crude oil and iron are on pause after the previous day’s fall but Gold price struggles to defend two-day recovery as banking fears lurk behind the towel.

EURUSD bulls cheer softer USD and hawkish ECB speak to lead the G10 currency pair buyers whereas GBPUSD occupies the second rank. Even so, AUDUSD remains depressed at a six-week low on mostly downbeat Aussie inflation data.

Cryptocurrencies trade mixed whereas BTCUSD grinds higher at a one-week top but ETHUSD retreats.

Following are the latest moves of the key assets:

• Brent oil stays defensive near $81.00 after falling heavily the previous day.
• Gold lacks clear directions near $1,997, probing a two-day uptrend.
• USD Index reverses the previous day’s gains around 101.70.
• Wall Street closed in the red and weigh on the Asia-Pacific shares. On the same line are the equities in Europe and the UK during the initial hour.
• BTCUSD and ETHUSD remain indecisive around $28,400 and $1,860.

Traders prepare for the US data

Although the bears are taking a breather, the market isn’t on the optimist’s table as fears of banking fallouts and US debt limit expiration loom. Adding strength to the uncertainty are hawkish comments from most central bankers even as economics aren’t too upbeat, which in turn highlights recession woes.

That said, a few of the top-tier companies are yet to report quarterly earnings and may well disappoint the traders, together with the likely downbeat US Durable Goods Orders and Q1 GDP.

Hence, Wednesday’s momentum appears a consolidation of the previous day’s moves ahead of the key US data rather than a return of the optimism, which in turn requires trades to remain cautious before taking any major positions.

On the other hand, a slump in the First Republic Bank’s shares weighs on the BTCUSD and ETHUSD even as Bitcoin remains defensive amid hopes of more upside.

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

US data, risk catalysts are the key

As the markets are jittery and the US Q1 GDP is up for publishing on Thursday, today’s US Durable Goods Orders for March become more important. With this, a surprise positive reading could allow the traders to better prepare for Thursday’s US growth numbers and Friday’s US Core PCE Price Index, known as the Fed’s favorite inflation index.

May the trading luck be with you!