Risk assets steady and the pound rises
S&P500 => The index rises after six days of losses
BTC/USD => The cryptocurrency rises over 20k
EUR/GBP => The pound falls below 0.90
S&P500 steadies ahead of data drop
The S&P 500 fell 1% yesterday, marking its sixth straight day of declines as bearish sentiment continued to dominate. The S&P 500 dropped to its lowest level since December 2020, putting losses this month alone to almost 8%. US treasury yields continued to rise along with the USD as the likelihood of a recession grows. Over 400 of the 500 stocks on the S&P closed lower. Today the futures are rising as the market turns its attention to US durable goods orders, new home sales, and consumer confidence. Stronger than forecast data could raise fears of a more aggressive Fed and drag stocks lower
Where next for the S&P500?
S&P500 broke below the multi-month rising trendline, falling to support at 3636, the 2022 low hit in June. The RSI tipped into oversold territory so some consolidation, or a move higher, at this level could be on the cards. Sellers will look for a move below 3636 to extend the bearish trend towards 3500 round number. Meanwhile, buyers will look for a move over 3720, the July 14 low, to bring 3800, the May low into play.
BTC/USD rises over 20k
Bitcoin rose 2% yesterday even as stocks closed lower, and today has pushed over 20k for the first time in a week as risk assets across the board rise. Even so, BTC/USD continued to trade within the narrow trading range it occupied for over a week. Given the size of the selloff in US stocks, with the Dow Jones falling into a bear market, Bitcoin has shown resilience. In Crypto news, Australia expects to complete its digital currency by next year. Meanwhile, Walmart announced a major NFT initiative, and Walt Disney hinted at increasing metaverse presence, adding credibility. Token2049, in Singapore, expects to see 7000 people attend, and 2000 companies will be represented. The event, which attracts developers and executives from leading Web3 and blockchain-related companies, highlights Singapore’s resurgence as a crypto and business hub.
EUR/GBP snaps a 3-day winning streak
EUR/GBP is falling, snapping a three-day losing run. The pound has steadied after crashing to a 2.5 year lower versus the euro on Monday as investors continued to digest the Chancellor’s huge, funded tax cut package. The Chancellor has finally said that he will release more details on bringing dent levels under control in November and BoE Governor Andrew Bailey said that the central bank will step in if needed. These comments have so far stemmed the selloff continuing into today. Meanwhile, the euro gained yesterday despite weaker than expected German IFO business sentiment data and after ECB President Christine Lagarde expressed some concerns about euro weakness. Today, Christine Lagarde is due to speak again. More hawkish comments could lift the euro higher.
Support can be found at 0.8850 (weekly low) and 0.88 (round number).
Resistance for the pair can be seen at 0.90 (round number) and 0.9283 (2022 high).