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MTrading Team • 2023-01-17

GBPUSD regains upside momentum after UK jobs data

GBPUSD regains upside momentum after UK jobs data

Global markets remain dicey after a softer start, even as the US markets resume after a long weekend. The risk profile appears mixed as the Treasury bond yields extend the previous day’s rebound but the US stock futures ease from a one-month high.

US Dollar fails to defend Monday’s corrective bounce off the seven-month low amid mixed concerns surrounding recession and the Fed. However, the Antipodeans and commodities appear to struggle in cheering the softer USD as traders doubt China’s upbeat data.

GBPUSD prints mild gains even as the UK Claimant Count Change eased and the Unemployment Rate remained unchanged whereas USDJPY pares recent losses ahead of Wednesday’s all-important Bank of Japan (BoJ) monetary policy meeting.

Gold drops for the second consecutive day but Brent oil snaps a two-day downtrend with mild gains.

Cryptocurrencies consolidate recent gains around the multi-month high even as options market flash price-positive signals.

Following are the latest moves of the key assets:

  • Brent oil rises for the first time in three days, up half a percent near $84.40 by the press time.
  • Gold drops for the second consecutive day to $1,910 at the latest.
  • USD Index struggles for clear directions around 102.32 after bouncing off the multi-day low the previous day.
  • Wall Street was closed on Monday but stocks in the Asia-Pacific region, as well as equities in Europe and the UK, trade mixed at the latest.
  • BTCUSD and ETHUSD print mild losses around the multi-day high, close to $21,100 and $1,560 as we write.
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Mixed feeling persists

Tuesday’s trading remains mixed even as the full markets return after a long weekend in the US. The reason could be linked to the recently mixed US data and anxiety over the global economic slowdown. Also confusing traders is China’s inability to please market players despite reporting upbeat GDP, Industrial Production and Retail Sales data.

Elsewhere, the start of the World Economic Forum (WEF) in Davos marked pessimism among the policymakers and economists as a survey suggests looming recession woes among the diplomats. The same could be witnessed in the comments from ECB Chief Economist Philip Lane and growth matrices in the West.

UK’s Claimant Count Change eased in December but the Unemployment Rate remained intact and raised concerns for the BoE’s faster rate hikes after Governor Andrew Bailey cited workers’ strikes as the key cause for inflation fears in his testimony on Monday.

It should be observed that Gold prices pare recent gains as traders doubt the metal’s surge despite looming inflation fears as the Treasury bond yields rebound. Alternatively, Brent oil prices recover after declining in the last two days amid hopes of more energy demand from China.

Options market data for Bitcoin signals bullish bias among the traders while ETHUSD grinds higher amid hopes of more NFT-linked growth.

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

Nothing major ahead of the key Wednesday

The second-tier US data and Canadian inflation numbers may entertain intraday traders on Tuesday. However, the cautious mood ahead of Wednesday’s key BoJ monetary policy report, the UK inflation report and the US Retail Sales may restrict the market moves during the rest of the day. Even so, Wall Street moves are worth observing as Treasury bond yields appear to bottom out.

May the trading luck be with you!