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MTrading Team • 2023-04-13

Oil price consolidates recent gains at 11-week high amid inactive markets

Oil price consolidates recent gains at 11-week high amid inactive markets

Thursday marks the usual inaction after a volatile Wednesday, despite the presence of the Aussie employment numbers and China trade figures, not to forget the UK statistics. 

While tracing the catalysts, the confirmation of previous bias from the US data and surer signals of the Fed’s policy pivot can be linked to the latest inaction. On the same line are the talks of a mild recession in the West, versus economic recovery in the Asia-Pacific zone led by India and China.

The US Dollar, however, remains pressured as the latest US CPI came in softer and the FOMC Minutes also failed to release any surprises. Additionally weighing on the greenback are downbeat yields amid economic slowdown woes.

Given the softer USD, the Gold price manages to remain firmer for the third consecutive day but the crude oil lacks upside momentum at the highest levels since late January.

Further, GBPUSD also grinds higher despite unimpressive UK data, mostly downbeat, whereas the EURUSD lacks direction ahead of second-tier Eurozone statistics.

AUDUSD jumps the most among the G10 currency pair on strong Aussie employment numbers whereas USDCHF came in second position due to the Swiss Franc’s safe-haven nature.

On a different page, ETHUSD struggles above $1,900 amid the successful completion of heavy withdrawals due to the Shanghai update. However, BTCUSD regains upside momentum after pausing a four-day uptrend the previous day.

Following are the latest moves of the key assets:

  • Brent oil fades upside momentum near $86.80 after two consecutive days of advances.
  • Gold rises for the third consecutive day to around $2,020 at the latest.
  • USD Index drops below 101.50 to print three-day downtrend.
  • Wall Street closed with minor losses while equities in the Asia-Pacific region traded mixed. However, shares in Europe and the UK seem slightly positive during the initial hour.
  • BTCUSD and ETHUSD grind higher around $30,100 and $1,930 at the latest.
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Aussie, China data fail to impress traders after US catalysts played their game

Having witnessed a comparatively more active day backed by the US inflation and Fed minutes’ releases, the markets slip into the dicey mode as traders have finally confirmed the brakes on the rate hike trajectory at major central banks. With this, a surprise positive by the Aussie jobs report failed to impress the traders, despite fueling the AUDUSD, whereas China’s trade data got mostly ignored with mixed details and more attention on recession woes.

It’s worth observing that central bank officials have started defending their current monetary policies but refrained from any more rate hikes, which in turn suggests proximity to the policy normalizations.

Amid these plays, equity traders struggle to remain optimistic amid the mixed Q1 earnings season at Wall Street but bond traders stay active as economic slowdown woes loom. That said, commodities regain their previous attraction, mainly led by the Gold price, amid the softer US Dollar while Antipodeans also grind higher on hopes of China’s strong recovery.

Elsewhere, the cryptocurrencies seem to glide on a smoother run towards the north as anticipated price negatives seem to fail in taming ETHUSD and BTCUSD upsides.

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

US PPI, central bankers’ comments eyed 

While the US CPI and Core CPI have confirmed easing price pressure in the US, traders will seek more clues of the same, as well as dovish central bank comments, to expand their US Dollar shorts. Additionally important will be the growth comments from the IMF and World Bank gathering in Washington.

May the trading luck be with you!