AUDUSD holds mild gains even as markets turn cautious ahead of key central bank meetings

Global markets appear dicey as traders await the all-important central bankers amid fears that the neutral rate is near. The risk profile appears somewhat blurred even as stock futures drop and the yields grind higher.

Headlines from China and Russia have been worrisome but the Aussie data helps AUDUSD to remain firmer ahead of Tuesday’s RBA. 

Prices of gold and crude oil remain pressured while those of other commodities grind lower amid fresh covid woes from China.

BTCUSD and ETHUSD extend Friday’s losses despite cautious optimism over Ethereum’s Merge and Elon Musk’s complete takeover of Twitter.

Following are the latest moves of the key assets:

• Brent oil drops for the second consecutive day, down 1.5% to $94.80 at the latest.
• Gold prints a three-day downtrend as sellers poke $1,638 support by the press time.
• USD Index buyers cross 111.00 hurdle, up 0.42% intraday as we write.
• Wall Street closed positive as Dow Jones braced for the biggest monthly jump since 1976.
• BTCUSD and ETHUSD are both mildly offered around $20,500 and $1,580.

The big week begins with mixed feelings

Although Friday’s US inflation numbers renewed hawkish Fed bets, the fears that the US central bank policymakers might signal slower hikes starting from December seemed to challenge the US dollar bulls. Even so, the greenback remains mostly firmer, except for the dollars of Australia and New Zealand.

Aussie Retail Sales and expectations of stronger rate hikes from the RBNZ keep the AUDUSD and the NZDUSD firmer. Even so, fresh covid-led lockdowns in China and downbeat PMIs for October challenge the Antipodeans, as well as the commodity prices.

Elsewhere, fears of recession inside the Eurozone grew stronger as Russia dumps the grain deal. On the same line, the UK’s political optimism also fades amid delayed budget announcements from the new government.

It should be noted that the chain matrices and twitter’s silent roll-out of the NFT trading feature tried to defend the cryptocurrency buyers but the broad fears of hawkish central bank moves challenges the optimists.

⏫ 🟢 Strong buy: USDJPY

⏬ 🔴 Strong sell: ETHUSD

⬆️ 🟢 Buy: USD Index, USDCAD, Nasdaq, EURUSD

⬇️ 🔴 Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

EU inflation, GDP and second-tier US data on the table

While the central bankers are likely to dominate this week’s moves, the first readings of EU inflation and Q3 GDP will be crucial for intraday directions. Also, the second-tier US PMIs and activity numbers might offer extra directions to traders. It should be noted, however, that the anticipated rate hikes are already priced-in and may not please the greenback buyers unless turning down the odds of easy rate lifts in the future, which in turn requires traders to remain cautious before the actual outcome.

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