Today is a bank holiday for the US and Canada. However, volatility persists. For example, gas prices surged more than 30% over the weekend, and the US Dollar Index reached new price highs. Investors for the day mainly turn their attention to the European gas crisis and the UK’s next Prime Minister.
Bitcoin - Technical View
Bitcoin is again lower than the market opened this morning, with the price declining by 1.20% and 1.45% over the past five days. The price has not maintained momentum since its significant decline in the previous month. Investors are most likely awaiting further price drivers.
The main threat to the asset is the monetary policy, specifically in the US and other regions. According to the latest reports, 70% of investors believe the Federal Reserve will increase interest rates by 75 basis points at the department's meeting on the 21st of the month. European investment banks, such as Barclays, have advised Bloomberg this morning that the European Central Bank will likely hike by 0.75%.
If forecasts materialize, the US Dollar will likely continue to strengthen, and cryptocurrencies will be further pressured. Some traders are asking whether this increases the likelihood of bankruptcies of crypto companies. If this is the case, the price will again be further pressured.
The strong employment sectors globally and consumer confidence are positive for the asset. If confidence remains high and we see an improvement in risk appetite, traders may look to potentially invest at a lower price.
S&P 500 - Technical View
The S&P 500 is seeing little volatility today due to the US bank holiday but may well see an increased volatility tomorrow due to the lost trading session. On Friday, the index declined by a further 1.08%.
During the first few hours of the US trading session, the price had increased but then declined by 2.21% within only 90 minutes. The decline was towards the end of Friday’s session, indicating buyers are not holding onto the position.
At the moment, the performance of companies is less important as it is being overshadowed by higher interest rates and lower investor confidence. Nonetheless, investors continue to monitor the latest developments for components.
One of the components is Ford Motor Company (NYSE:F) which reported an increase in sales in August by 27.3% compared to the same period a year earlier, while the total number of cars sold was fixed at around 158,000 vehicles. The same figure for electric vehicles quadrupled to 5.9k cars.
This week the US bond market began trading in the positive zone, which indicates that investors are currently choosing lower-risk assets correlated with the Dollar. The popular 10-Year Treasuries gained 0.13%, and the long-term US 20-Year bonds increased by 0.12%.
European stocks are also significantly down today due to the European Gas Crisis, which has significantly lowered global investor confidence. Traders are also keeping in mind this may also affect investor confidence outside the EU.
XAU/USD - Technical View
The price of the XAU/USD increased over two consecutive days. This includes Friday, which was one of the rare occasions the market had experienced when the Dollar and gold increased in value simultaneously, whereas they are normally inversely correlated.
However, it should be noted that the price remains within a downward trend as price swings continue to remain lower. It should also be noted that the price has formed a “double top,” which can be viewed as a negative for the price unless it can break to a higher high.
According to the reports of the world's leading mint in the US, August was the weakest month of this year in terms of sales of the precious metal. The US Mint sold 46,000 ounces of gold in the form of the American Eagle coin, which is 28% lower than in July and 66% down from August 2021.
American Buffalo coin sales were 17,500 ounces, down from 39,500 ounces in July. Investors will also be awaiting the report on commodity futures to be released from the US Commodity Futures Trading Commission later in the week. This report will confirm how many traders are speculating in each direction, which traders can also consider.