- British pound under pressure, tanks to one-month lows against the dollar
- AUDUSD sell-off persists as pair drops to nine-month lows
- Gold holding steady amid dollar strength across the board
- US indices struggling for direction amid bond tapering jitters
- Bitcoin and Ethereum showing signs of edging higher after bounce bank
The GBPUSD pair risks further losses after a recent slide through the critical 1.3700 level. The pair has turned bearish and is now susceptible to further sell-off as the US dollar continues to strengthen across the board. The British pound sentiments have also been weighed heavily by the escalating COVID-19 situation that has seen traders shun riskier currencies in favor of safe havens like the dollar.
GBPUSD sell-off
While GBPUSD is clearly oversold after plunging to one-month lows, there are no signs of stabilization amid pound weakness and dollar strength. Consequently, the pair looks vulnerable to dropping to the 1.3575 level on bears taking out the 1.3600 level.
On the flip side, the bulls need to defend the 1.3600 level to have any chance of fueling a bounce back after the recent sell-off.
GBPUSD’s outlook is looking increasingly bearish following a slate of disappointing economic data. Retail sales coming worse than expected at -2.5% continues to weigh heavily on the pound. Additionally, growing talk that the Federal Reserve could start tapering bond buying continues to fuel dollar strength sending the pair lower.
AUDUSD at 9-month lows
The AUDUSD is another pair under immense pressure amid dollar strength across the board. The pair has slid to nine-month lows. The escalating COVID-19 situation that has resulted in lockdowns across the country has weighed heavily on the Australian dollar on eliciting fears of a slowdown in economic growth.
Given the strength of the downward pressure, the pair remains susceptible to plunging to the 0.7000 level.
AUD outlook is currently negative as traders rush to safe-havens to shield their portfolios against the escalating COVID-19 situation. Talk of the FED tapering sending the US dollar high also continues to take a toll on the pair fuelling the sell-off.
Gold resilient against the dollar
In the commodity markets, gold remains flat heading into the weekend. A strengthening greenback has curtailed its upward momentum. XAUUSD’s upward momentum remains curtailed near the $1790 level that is turning out to be the immediate resistance level.
A rally followed by a close above $1790 should pave the way for bulls to fuel a rally to the $1800 level. XAUUSD has remained resilient despite the dollar strengthening across the board. This can be attributed to traders rushing to the precious metal to hedge against the fallout triggered by the COVID-19.
Demand for safe-haven has edged higher as concerns over the Delta variant continue to escalate. The uncertainty caused by the Delta variant of COVID-19 should continue to be supportive to XAUUSD as it tends to rise during such uncertainties.
US indices under pressure
In the equity markets, major stock indices in the US are struggling for direction amid growing concerns that the Federal Reserve will start removing stimulus that has been the catalyst over the past year. The S&P 500 was the only one to finish on the green rising 0.1% on Thursday as the Dow Jones Industrial Average fell 0.2%. Tech-heavy NASDAQ ended the day down 0.1%.
While investors remain upbeat about the general outlook, concerns over the FED tapering at a time when the COVID-19 situation appears to gain, momentum continues to send shockwaves and jitters. Most investors remain cautious, opting to play safe amid concerns that the Covid-19 pandemic will dent global economic recovery.
Bitcoin bounce back
In the crypto markets, Bitcoin is once again showing signs of powering high after coming under pressure for the better part of the week. Having found support above the $44,000 level, BTCUSD has started edging higher, taking out the $47,000 level.
The $48,000 level remains the immediate resistance level standing in the way of the flagship cryptocurrency powering to the $50,000 level.
Ethereum has also regained its upward momentum after initially tanking to the $3,000 level. ETHUSD has since powered to the $3,225, waiting to see if it will power past four-month highs of $3,300
The rally in the crypto markets comes amid reports that hackers gained access to Japanese exchange Liquid and ran away with $100 million worth of tokens. The company has already confirmed that some of its digital wallets were compromised.
