Volatility rising, crypto correcting and Dollar gearing up steam

Frank Walbaum

Important news for the week

Wed, 05th, 14:15 CET US ADP employment change.
Thu, 06th, 13:00 CET UK BoE interest rate decision.
Fri, 07th, 14:30 CET US NFP employment data.
Fri, 07th, 14:30 CET CA Unemployment rate.

US trade wars

It seems that Donald Trump will continue with adding fresh tariffs to most trading partners. He might use these tactics in order to generate better trading results with other countries in the long run. The situation reminds traders on Trump’s first Presidency, where some tweet messages caused markets to move erratically. It might be interesting to observe how other countries will react as the European Union won’t be in bad shape in this matter for example.

Market talk

The week starts with fresh volatility in markets. After the implementation of new tariffs, most markets seem to face profit-taking for now. In particular the crypto space has lost some steam with XRP initially trading well below the USD 2.0000 level again. Also equities had lost some momentum as most indices opened trading lower this week. Furthermore also the Dollar had started to trade below important support levels, potentially indicating further negative momentum ahead. On the other hand currently a slight retracement in most markets can be seen. It might be too early to say whether the correction will be over now or another wave of selling pressure might be seen.

Tendencies in the markets

Equities weak, USD stronger, cryptos weak, oil positive, Silver positive, Gold positive, JPY sideways.

Author

Frank Walbaum

AUD/USD sits near monthly high, around 0.7035 on hawkish RBA

AUD/USD trades around 0.7030-0.7035 in the Asian session on Thursday, near its monthly top, as recent hawkish comments from RBA officials continue to underpin the Australian Dollar. The US Dollar, meanwhile, struggles to lure buyers amid further declines in US bond yields, adding support to the pair. However, Fed rate-hike bets and geopolitical uncertainty help limit losses for the safe-haven buck, warranting caution for Aussie bulls.

USD/JPY remains confined in a familiar range; holds steady above 158.00

USD/JPY extends its consolidative price action through Thursday's Asian session, trading just above 158.00 amid diverging forces. Uncertainty over the timing of the next BoJ rate hike keeps Japanese Yen bulls on the defensive. The US Dollar, meanwhile, languishes near multi-week low amid declining US bond yields. Furthermore, looming intervention risks limit JPY losses and cap the pair. Traders also seem hesitant ahead of the Fed and BoJ meetings next week.

Gold hangs near one-week low; eyes $4,100 break amid Fed hike bets

Gold attracts fresh sellers in Thursday’s Asian session, sliding closer to a one-week low touched the previous day. Firming expectations for an imminent Fed rate hike, bolstered by oil-driven inflation risks, weigh on the non-yielding bullion. Meanwhile, declining US bond yields counter geopolitical uncertainty, keeping US Dollar bulls on the defensive. This helps XAU/USD defend $4,100.

XRP and XLM recovery stalls below EMAs

Ripple (XRP) and Stellar (XLM) remain under pressure on Thursday as both struggle to sustain their recent recovery attempts. XRP trades below $1.36, while XLM slips beneath $0.183, as mixed derivatives metrics, weakening momentum indicators and heating market conditions suggest cautious market sentiment. Derivatives data shows weakening conditions for Ripple and Stellar.

What the midterm elections mean for Treasury yields, the Dollar and Gold

Democrats are priced to take the House, so November 3 comes down to the Senate and how much Washington can borrow without the other party. Treasury yields will show the answer first, then the Dollar and Gold. On November 3, Americans vote for all 435 House seats and 35 Senate seats. For bond prices, the result comes down to one thing: how much the government will borrow over the next two years.

The US Dollar fell. Gold didn't rally. That tells you everything

Gold (XAU/USD) is struggling to capitalize on a weaker US Dollar (USD), after repeatedly failing to establish itself above the $4,200 level. The precious metal remains confined to a relatively narrow trading range despite a combination of developments that would normally support higher prices.