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MTrading Team • 2022-04-19

Sluggish trading continues despite Ukraine, covid and Fed weigh on sentiment

Sluggish trading continues despite Ukraine, covid and Fed weigh on sentiment

Global markets remain inactive after holiday-thinned trading conditions offered a lackluster week-start. 

Concerns surrounding the Russia-Ukraine crisis and China’s covid conditions join hawkish Fed rhetoric to keep bears hopeful. However, a lack of major data/events and an extended weekend challenge momentum traders.

The inactive markets fail to please buyers of gold and crude oil but the US dollar remains firmer around a two-year high. That said, the key cryptocurrencies, namely BTCUSD and ETHUSD also fade corrective pullback from the monthly low.

As traders return to their desks and the economic calendar also adds comparatively more catalysts, Tuesday can entertain momentum traders.

Following is the list of major assets’ latest performances:

  • BRENT OIL retreats from monthly high to around $112.00, snaps four-day uptrend.
  • GOLD seesaws near five-week high, mildly bid near $1,980.
  • The USD Index remains firmer around 101.00 rate, near a two-year high.
  • Dow Jones, NASDAQ, and S&P 500 printed mild losses on Monday.
  • FTSE 100 prints mild losses near 7,600 while DAX and EuroStoxx drop over 1.0%.
  • BTCUSD remains pressured around $40,600 whereas ETHUSD also struggles to defend the $3,000 mark.
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Traders await more clues

Easter holidays in the West, as well as some parts of the Asia-Pacific region, restricted market moves on Monday even as the Wall Street benchmarks tried to run the wheel.

Fears of global economic hardships, even though, weighed on the key stock indices as the World Bank trimmed 2022 growth forecasts. Adding to the market fears were comments from the Fed board member James Bullard who supports heavy rate hikes to tame fierce reflation fears. Furthermore, escalating military attacks in multiple Ukrainian territories on late Monday joined China’s extended lockdowns in Shanghai to favor the bears, despite less market activity.

Shares in the Asia-Pacific zone, however, traded mixed during early Tuesday as the Japanese Finance Minister raised concerns over sharp declines in the JPY. Also favoring the corrective pullback is the improvement in Japan’s Industrial Production.

The risk-aversion wave favors the US dollar but gold struggles to keep buyers happy. Additionally, crude oil also consolidates recent gains amid a lackluster trading session.

On a different page, BTC/USD and ETH/USD fail to keep the previous day’s rebound as firmer US Treasury yields and broad risk-off catalysts keep traders away from cryptocurrencies.

⏫ 🟢 Strong buy: USDJPY

⏬ 🔴 Strong sell: ETH/USD, BTC/USD

⬆️ 🟢 Buy: USD Index, gold, silver, Brent oil

⬇️ 🔴 Sell: DOW JONES, S&P 500, DAX, FTSE 100

More activity ahead

The US housing numbers and Fedspeak will join second-tier data from Canada, as well as a speech from the SNB Chairman Jordan, to offer an active day ahead. However, major attention will be given to the geopolitical and covid headlines, as well as Fed comments, which in turn are likely to keep bears hopeful.

As a result, the US dollar and gold are likely to keep their shine while riskier assets like equities and cryptocurrencies can track further south.

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