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MTrading Team • 2023-04-10

NZDUSD bears flex muscles as China news weighs on sentiment amid sluggish session

NZDUSD bears flex muscles as China news weighs on sentiment amid sluggish session

After Good Friday induced market inaction, Easter Monday resulted in thin trading activity. Even so, headlines surrounding China and Taiwan weigh on sentiment and allow the US Dollar to cheer Friday’s upbeat jobs report. The same joins the lack of major data/events to help the NZDUSD traders to pare RBNZ-led gains.

That said, prices of Gold also drop for the second consecutive day but those of Crude Oil grind higher amid supply woes. Other Antipodeans, namely AUDUSD and USDCAD also bear the burden of China-linked risk aversion amid sluggish Monday.

USDJPY grinds higher despite downbeat yields amid concerns that the Ueda will follow Kuroda’s footsteps and refrain from the sudden exit from the BoJ’s ultra-easy monetary policy. That said, EURUSD and GBPUSD remain directionless amid off in the UK and European markets, as well as recently hawkish comments from the respective central banks.

Elsewhere, BTCUSD and ETHUSD remain directionless after rising for the last two consecutive weeks.

Following are the latest moves of the key assets:

  • Brent oil prints mild gains above $85.00 by the press time.
  • Gold slips beneath $2,000 during two-day downtrend, printing minor losses of late.
  • USD Index grinds higher past 102.00 but lacks bullish conviction.
  • BTCUSD and ETHUSD remain directionless around $28,300 and $1,860.
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Sluggish start to the key week

Although the recent holidays restrict immediate trading moves, the presence of US inflation and FOMC Minutes highlight this week’s importance for market players. Also likely to keep the traders on their toes are escalating tension between the US and China, due to Taiwan, as well as the recession risks escalated by downbeat data from the key economies and their central banks’ clues of policy pivot.

It should be noted, however, that the yields appear hesitant in declining further and hence any surprise hawkish signals from the US can help the bond coupons and US Dollar to pare recent losses. The same may exert downside pressure on the Gold price as the metal has been sluggish of late. However, Crude oil is likely to stay firmer OPEC+ supply cut joins a likely increase in China demand and challenges to the output due to geopolitical woes.

Elsewhere, fears of a big move in the BTCUSD and ETHUSD keep the assets sidelined as traders await major industry developments scheduled for taking place in April.

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

Nothing major today

Given the Easter Monday holiday, traders may witness an illiquid session and the same can allow them to pare recent moves. With this, the NZDUSD gains major attention as it failed to cheer RBNZ’s hawkish surprise in the last week.

May the trading luck be with you!