- Strengthening of the US dollar
- Indices and commodities under selling pressure
- Cryptocurrency sell-off
Traders from North America returned to the markets today after a US and Canadian holiday yesterday and liquidity was no longer an issue. Nevertheless, today's economic calendar was relatively empty, especially during US trading hours. During the European session, the September ZEW reading showed that sentiment fell from 40.4pts to 26.5pts (expectations 30.0). The final GDP reading froM the eurozone for Q2 was better than the previous estimate (14.3% y / y compared to previous 13.6% y / y).
Most European indices finished today's session in red. The German DAX (DE30) lost 0.56% at the end of the cash session. Overseas indices are also performing poorly, with the exception of the technological Nasdaq100 (US100), which gains slightly. There is a clear shift towards the US dollar on the FX market, partially due to concerns regarding economic slowdown later in the year. CAD performs particularly poorly against the USD.
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Open account Try demo Download mobile app Download mobile appRisk-off sentiment is also visible in commodity markets - oil and copper dropped over 1%. Precious metals prices are falling due to the stronger dollar. In the evening hours, gold is trading slightly below $ 1800 an ounce. The cryptocurrency market has been hit by a sudden crash today, which we discussed in our afternoon posts. The price of Bitcoin plunged at one point nearly 20% despite the fact that El Salvador today accepted the major cryptocurrency as legal tender.
Tomorrow, the decision of the Bank of Canada (at 16:00 CET) will be in the spotlight. Today the USDCAD pair is testing a major resistance zone around 1.2640. As one can see, this level is marked by previous price reactions. It is worth noting that the currency pair recently broke above several technical hurdles - the downtrend line from the top of August 20, the upper limit of the descending channel and the 200-hour moving average. Should a break higher occur, then upward move may accelerate towards 1.2707 where local highs from the end of August are located. Source: xStation5
Gold fell more than 1.5% and broke below upward trendline and support at $1,800/oz, moving further away from a 2-1/2-month high of $1,833/oz hit last week as the US dollar strengthened and Treasury yields moved higher. If current sentiment prevails downward correction may be extended to the support at $1767. Source: xStation5
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