Easter holidays slow trading as market liquidity remains thin, despite positive trade headlines from China and Japan easing risk aversion. Major currencies and commodities consolidate, while the US Dollar struggles due to weak US data and IMF Chief Georgieva’s pessimistic outlook. Pressure on the Greenback grows with Trump’s ongoing criticism of Fed Chair Powell.
Optimism around US-China trade talks and potential deals with the EU, Japan, and the UK provides some market positivity, though global slowdown fears linger due to Trump’s tariffs. Meanwhile, geopolitical tensions—such as Israel’s stance on Iran and Russia’s issues with Europe—offer upside potential for some assets.
The US Dollar Index is on track for a weekly loss, while safe havens like Gold, JPY, and CHF remain on the bull’s radar. Further, AUDUSD and NZDUSD rise on US-China trade optimism, but USDCAD struggles despite rising crude oil prices. The ECB's dovish rate cuts weigh on EURUSD, though it still shows weekly gains. Lastly, GBPUSD remains strong, while cryptocurrencies are mixed and equities face potential weekly losses after a strong start.
The ECB's 0.25% rate cut, in line with market expectations, dampens EURUSD bulls, despite a fourth consecutive weekly gain. Talks of a June rate cut and hopes for an EU-US trade deal limit movement, especially during market holidays.
Meanwhile, optimism over a US-UK trade deal lifts GBPUSD to a 6.5-month high, although momentum is muted due to the holiday mood and recently mixed UK data.
Moving on, USDJPY is on a three-week downtrend, hitting its lowest point since October. Key factors driving this bearish move include strong safe-haven demand, optimism around the US-Japan trade deal, and hawkish signals from the Bank of Japan (BoJ).
AUDUSD and NZDUSD are set for their second consecutive weekly gain, fueled by broad US Dollar weakness and optimism around the US-China trade deal. However, USDCAD struggles despite rising crude oil prices, as concerns over US-Canada trade relations and the Bank of Canada's dovish stance put a floor under the pair's prices.
Gold stalls further upside near its all-time high due to a US Dollar bounce and market consolidation ahead of the Easter holidays. However, the bullion remains on track for a second consecutive weekly gain, supported by its safe-haven status, rising demand from China, and a weaker US Dollar.
Meanwhile, WTI Crude Oil is set for its first weekly gain in three, boosted by easing US-China trade war fears and optimism for more global trade deals, which could bolster energy demand. Additionally, concerns over potential supply disruptions from Israel’s planned strikes on Iranian nuclear plants and a softer US Dollar provide further support for oil prices.
Bitcoin (BTCUSD) and Ethereum (ETHUSD) lose market confidence despite Trump’s continued backing of crypto. The top cryptocurrencies struggle to gain traction from the softer US Dollar, hindered by thin market liquidity, ETF outflows, and lackluster on-chain data.
With the Good Friday and Easter Monday holidays in major markets and a light economic calendar elsewhere, liquidity will be reduced this week. However, ongoing news about US trade deals with key global economies may spark some excitement, leading to brief price spikes driven by speculators amid low market participation.
In this quiet market environment, the US Dollar may consolidate some of its recent losses, putting pressure on EURUSD bulls while also weighing on cryptocurrencies and the Canadian Dollar. Despite this, other major currencies, as well as assets like Gold and crude oil, are likely to maintain their current weekly trends, staying relatively stable amidst the holiday lull.
May the trading luck be with you!
