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MTrading Team • 2022-04-18

Ukraine, China propel gold, USD on Easter Monday, BTC, ETH stays pressured

Ukraine, China propel gold, USD on Easter Monday, BTC, ETH stays pressured

Global markets begin the weekly trading with mild losses but the Easter Monday off in multiple bourses restricted the moves during early Monday.

The risk-off mood continues to fuel the traditional safe-haven demand of gold and the US dollar whereas the greenback takes extra strength from the multi-month high Treasury yields. Sour sentiment weighs on the riskier assets like equities and cryptocurrencies whereas the Brent oil retreats from the monthly high amid firmer USD.

Looking forward, holiday-thinned trading conditions could challenge market players on Monday but the risks emanating from Ukraine and China can keep the bears hopeful.

Following is the list of major assets’ latest performances:

  • BRENT OIL eases from monthly high to around $111.00, snaps three-day uptrend.
  • GOLD renews five-week high and stays on the way to $2,000.
  • The USD Index remains firmer above the 100 rate, around a two-year high.
  • Dow Jones, NASDAQ, and S&P 500 printed losses on Thursday but traders await Wall Street open for fresh clues.
  • FTSE 100 prints mild gains above 7,600 while the US stock futures remain on the back foot with half a percent loss.
  • BTCUSD drops to a fresh low in five weeks after breaking $39,000 level, ETHUSD losses over 3.0% as it conquers $2,900 mark to renew the monthly low.
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Bears keep reins on geopolitical, covid concerns but holiday limits momentum

Having witnessed light trading amid the weekend, the market continues to sail on the risk-aversion wave, even as the Easter Monday disappoints momentum traders. Markets are off in Europe and some parts of the Asia-Pacific session while the economic calendar is left with no major data/events after Chinese macros flashed mixed numbers earlier in the day.

That said, better than forecast GDP in China couldn’t supersede downbeat Retail Sales and other macro data, which in turn added strength to the market’s risk-off mood and favored USD bulls. 

On the other hand, Russia’s unprovoked invasion of Ukraine escalated during the weekend and pushed policymakers to halt the peace talks aimed at establishing humanitarian corridors for civilians to evacuate the war-hit cities.

The aforementioned challenges to sentiment join China’s biggest covid-led lockdown to raise fears of a further supply crunch. As a result, major policymakers are on their way to dialing back easy-money policies that can tame inflation. However, BOJ Governor Haruhiko Kuroda reiterated his support for a weaker yen, terming it positive for the economy as a whole. The same propelled USDJPY towards refreshing multi-year high around 127.00.

The risk-off mood favors the US dollar to renew a two-year high above 110.00, also fueling   gold to approach the $2,000 threshold. Though, equities and cryptocurrencies have to witness losses of late due to the same.

Although market pessimism drives traders away from crypto whales’ accumulation of Bitcoin and a reduction in the transaction fees of Ethereum join multi-day low of the two top-notch e-currencies to tease buyers despite posting losses.

⏫ 🟢 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

A likely dull day ahead, but in favor of USD bulls

Given the off in European markets and Canada, preceded by holidays in major Asia-Pacific bourses, Monday is expected to be unimpressive for traders. 

However, the Western leaders’ readiness for more sanctions on Russia and Ukraine’s warnings of a severe war ahead will join China’s COVID-19 fears to weigh on the market’s mood and underpin the safe-haven demand of the US dollar and gold.

Elsewhere, BTC/USD and ETH/USD can lick their wounds amid cautious optimism but the same needs a pause from the USD bulls.

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