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Swiss GDP grew 0.3% qoq in Q2, below expectation of 0.4% qoq. Looking at some details, manufacturing contracted -0.5%. Construction contracted -1.7%. Trade dropped -2.1%. However, accommodation and food grew strongly by 12.4%.

By expenditure approach, private consumption rose 1.4%. Government consumption was flat. Equipment and software investment rose 2.5%. Exports of goods dropped sharply by -11.5%. Import of goods dropped -0.6% too.

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Gold price started a major decline from well above the $1,750 level against the US Dollar. The price traded below the $1,720 support to move into a bearish zone.

It traded as low as $1,688 and recently started an upside correction. There was a move above the $1,700 level and the 50 hourly simple moving average. An immediate resistance on the upside is near the $1,718 level.

The first major resistance is near the $1,725 level. The next main resistance could be near the $1,732 level, above which the price could start another steady increase.

On the downside, an initial support is near the $1,708 level. The next major support is near the $1,700 level, below which the price might decline towards the $1,688 support level in the near term. Any more losses might call for a test of $1,675 on FXOpen.

Cable hits new 29-month low on Monday, in extension of bearish acceleration in past three weeks, a part of larger downtrend.

The pound remains under strong pressure on risk aversion, driven by growing economic and geopolitical tensions that continues to lift dollar.

Today’s top event will be appointment of the UK’s new prime minister, with wide expectations that Liz Truss, current foreign minister and front runner to replace Boris Johnson, will be named as Britain’s next PM. If appointed, Truss will face a number of huge obstacles, as the country has been in a series of crisis since 2015 when Conservatives came on power.

Truss will face a fight with skyrocketing inflation, which reached a double-digit values, soaring cost of living, industrial sector crisis and recession that altogether darken the outlook.

The sentiment remains firmly negative in such conditions, while bearish technical studies on all larger timeframes (daily/weekly/monthly) add to negative outlook.

Bears eye 2020 low (1.1410) violation of which would risk further fall and unmask lows of 1985.

Meanwhile, near-term action may see some price adjustment as daily studies are oversold.

Upticks should offer better selling opportunities while the price action stays below falling 10DMA (1.1670).

Res: 1.1569; 1.1634; 1.1703; 1.1760.
Sup: 1.1430; 1.1410; 1.1352; 1.1227.

EURUSD opened with a gap lower on Monday to chart a new 20-year low at 0.9877.

The constraining descending line, which connects all the lows from August 2018, continued to buffer downside pressures ahead of Thursday’s ECB policy announcement, but despite that floor, the technical picture cannot detect any buying appetite. The RSI has erased its latest bounce and is heading south again. Likewise, the Stochastics have also pivoted to the wrong side, while the MACD is trying to resume its bearish wave below its red signal and zero lines.

As regards the market trend, there is no improvement here either, with the pair maintaining a series of lower lows and lower highs within the 2022 bearish channel. The negative slope in the simple moving averages (SMA) is backing the bearish direction too.

Should the bears claim the 0.9900 region, the pair could directly descend towards the 2002 limits registered within the 0.9780 – 0.9700 area. A sharper decline could shift all attention to the the channel’s lower boundary at 0.9600. Another disappointment here could see an extension towards the 0.9450 barrier last seen during 2000 – 2001, further worsening the bearish outlook.

In the event of an upside reversal, the 20-day SMA could once again ruin any recovery around 1.0067. Higher, the 50-day SMA and the channel’s upper band both seen within the narrow 1.0156 – 1.0186 territory may defend the negative direction in the market. If they prove fragile this time, the bullish correction could fasten towards the August peak of 1.0367, a break of which is needed to reverse the bearish trend.

Summarizing, the odds have once again shifted in bears’ favor and unless the 0.9900 base stands firm, the sell-off could exacerbate towards the 0.9780 – 0.9700 zone. 

Gold has been trending lower since early March, generating a profound structure of lower highs and lower lows within a descending channel. Although the precious metal’s latest downleg came to a halt at the six-week low of 1,688, the broader bearish technical picture remains intact.

The short-term oscillators currently suggest that near-term risks remain tilted to the downside. Specifically, the RSI is flatlining beneath its 50-neutral mark, while the MACD histogram is below both zero and its red signal line.

Should selling interest intensify further, the price might encounter immediate support at the six-week low of 1,688. Sliding beneath that level, the bears could aim for the one-year low of 1,681. A violation of the latter would send bullion to form fresh bottoms, where the next obstacle could be found at the April 2020 support of 1,640.

On the flipside, if negative momentum fades and the price drifts higher, the recent support of 1,727 may cap initial advances. Piercing through this region, the precious metal could ascend towards 1,765 or higher to test the August peak of 1,807.  Crossing above the latter, gold traders may shift their attention to the 200-day simple moving average (SMA), currently at 1,835.

Overall, despite the latest signs that the market is trying to push for some recovery, gold maintains both its bearish short- and long-term outlooks. For the former to alter, the price needs to decisively cross above the 1,807 ceiling.

Market picture

Bitcoin declined 0.4% over the past week, ending at around $19,900 without experiencing any significant movement during that time. For now, we can only say that the crypto market is wagering on the strengthening of the dollar, and to a markedly lesser extent than other markets. Ethereum added 5.9% to $1570, while other leading altcoins from the top ten showed mixed dynamics: from a decline of 1.3% (BNB) to a growth of 13% (Cardano).

Total crypto market capitalisation, according to CoinMarketCap, rose 2.5% over the week to $976bn. The cryptocurrency Fear & Greed Index lost 8 points over the week to 20, returning to “extreme fear” status.

Bitcoin stood aloof from key market movements last week, moving on a short leash around $20K. Meanwhile, tectonic shifts were taking place in the markets as the dollar continued to renew multi-year highs and stock markets returned to a sell-off.

Cardano rose sharply at the end of the week on the back of the news. IOHK, the company behind the Cardano project, has set a date for Vasil’s update – the largest and most important hardfork in the project’s history will take place on September 22.

News background

According to analytics service TipRanks, HODLers are refusing to sell the cryptocurrency. 62% of wallets hold bitcoins for more than one year. 32% of addresses control BTC for 1 to 12 months, and only 6% of investors hold cryptocurrency for less than 30 days. At the same time, both profitable and unprofitable addresses have a 48% share.

Bitcoin miners’ revenues in August amounted to $657 million and increased for the first time since March. The growth in revenues was helped by the growth of the first cryptocurrency’s network hash rate.

Despite the crisis, investor confidence in cryptocurrencies increased slightly over the quarter. 65% of retail investors and 70% of institutional investors trust digital assets, according to a survey by cryptocurrency exchange Bitstamp.

Cryptocurrencies are helped by the aura that, in the long term, they are more promising than stocks and other risky assets, as they are at an early stage of adoption and still undervalued by the market.

Ethereum co-founder Vitalik Buterin called the current bear cycle expected. In his view, Terra’s collapse and market decline are a boon for the crypto industry, as they help identify problems and unsustainable business models well.

With the rising capitalisation of the crypto market, the DeFi sector could pose long-term risks to financial stability, according to the US Federal Reserve.

EUR/USD

Today's trading session of the single European currency started with a strong bearish pressure. At the time of writing of the analysis, the bears are trying to breach the support at 0.9917. The next one ahead of them would be the one at 0.9700. If the bulls manage to recover their positions, they could try to breach the resistance at 0.9950. Due to the bank holiday today in the U.S. and the lack of significant macroeconomic news, big market moves are rather unlikely.

USD/JPY

The yen's bull run continues. Today's trading session started with a confirmation of the resistance breach at 140.20. The next resistance before the bulls at the level of 141.00 could be found in a longer-term chart. If the bears manage to impose themselves on the market, we could witness an attempt to reach the support at 139.00. Volatility is expected to remain low today. Today's trading session of the single European currency started with a strong bearish pressure. At the time of writing of the analysis, the bears are trying to breach the support at 0.9917. The next one ahead of them would be the one at 0.9700. If the bulls manage to recover their positions, they could try to breach the resistance at 0.9950. Due to the bank holiday today in the U.S. and the lack of significant macroeconomic news, big market moves are rather unlikely.

GBP/USD

The pound continues to lose ground against the U.S. dollar. At the time of writing the analysis, the bears have targeted the key support at 1.140. If the bulls tip the scales in their favour we could witness an attempt to reach the support at 1.160. Today, no significant macroeconomic news is expected neither from the UK, nor from the U.S..

EUGERMANY40

At the time of writing the analysis of the German index, the bears have managed to consolidate the support breach at 12700. If they continue at this pace, we could witness an attempt to breach the support at 12300. On the other hand, if the bulls manage to gain the upper hand, we could witness a recovery of their positions to the 12880 level.

US30

Today's trading session of the U.S. blue chip index starts with the bearish attempts to reach the support at 31315. If the bulls manage to tip the scales in their favour, we could witness an attempt to reach the resistance at 31640. These moves will be quite a tough task for traders due to the expected low volatility today.

Equities remain under pressure as investors brace for more aggressive tightening by central banks. A bearish MA cross on the daily chart suggests that sentiment has shifted to the cautious side and the selling pressure might intensify. On the hourly chart, the index found support at the origin of the rally back in mid-July at 12550, but 13040 has proven to be a tough level to crack. The whipsaws could direct the Dax 40 back to the double bottom near 12420 which is the level that separates a recovery from a bearish continuation.

Bullion finds temporary respite in the wake of mixed nonfarm payrolls. The price action is hovering above July’s low and a critical floor at 1680. This is a decisive moment as a breakout would invalidate the previous recovery and send the precious metal into a bearish spiral. A combination of profit-taking from short-term traders and bargain hunting from medium-term traders may drive the price higher. 1724 is the first resistance and its breach could lift offers to the support-turned-resistance at 1745.

The US dollar rallies as hiring remains strong despite moderate wage growth. As the pair approaches March 2020’s lows around 1.1450, the RSI’ oversold situation prompts sellers to take some chips off the table. Along with ‘buying-the-dips’ in this demand zone, the pound may find some support. 1.1650 is the closest resistance where trend followers could be expected to sell into strength. A fall below March 2020’s lows at 1.1450 would force the last buyers out and open the door for further extension to the south.