Global stocks bounced back after falling sharply on Monday. In the US, futures tied to the Dow Jones and S&P 500 indices rose by more than 0.42% and 0.36%. The two declined by 2% and 1.60%, respectively. In Europe, the DAX, CAC 40, and Stoxx 50 rose by more than 0.40%. The indices were buoyed by the relatively strong quarterly results from companies like UBS, IBM, and BHP. BHP, the world’s biggest miner, said it produced 1.636 metric tons of copper in the past 12 months to June. This production was about 5% below the same period a year ago. The firm said that it will report better profitability this year. Meanwhile, UBS said that its net profit rose to $2 billion in the second quarter from $1.3 billion. This performance was boosted by the bank’s wealth management business.
Cryptocurrency prices declined sharply today as concerns about the Covid pandemic continued to increase. The price of Bitcoin declined below the important support at $30,000 while Ether declined to $1,700. In total, the market capitalization of all cryptocurrencies tracked by CoinMarketCap declined by more than 7% in the past 24 hours to $1.18 trillion. At their peak, these currencies were valued at more than $2 trillion. Still, on-chain data showed that some whales were buying the dip. According to Glassnode, the number of Bitcoin in reserves of centralized exchanges was declining at the fastest pace in a few months. This could be a sign that large buyers were accumulating the currency at a discount.
The economic calendar was relatively muted today. Data published earlier today showed that the national consumer price index rose to 0.2% while core CPI rose to 0.2%. This rate is substantially lower than the BOJ target of 2.0%. Meanwhile, in China, the PBOC left interest rates unchanged at 3.85%, where it has been in the past few months. Other important numbers published today were the German PPI data and the Eurozone current account. The US will publish the latest building permits and housing starts later today.
The BTCUSD declined sharply today as the crypto sell-off accelerated. It dropped to 29,301, which was slightly above the lowest level in June. As a result, the pair has moved below the 25-day and 15-day moving averages. It has also moved below the lower line of the descending channel while the Relative Strength Index (RSI) has dropped to the oversold level. Therefore, there is a possibility that the pair will have a break and retest pattern, where it moves back to the lower side of the channel. It will then likely keep falling as bears target the next key reference level at 25,000.
The ETHUSD pair also crashed to the lowest level since June 22. The pair dropped below the short and longer-term moving averages on the four-hour chart while the MACD has moved below the neutral line. The pair also formed a double-bottom pattern whose neckline is at 2,412. Also, the price is along the middle line of the Bollinger Bands. Therefore, there is a likelihood that the pair will have a relief rally since a double-bottom is usually a bullish sign.
The EURUSD pair was little changed after the latest German PPI data. On the four-hour chart, the pair is between the descending yellow channel. It has also moved below the 25-day moving average while the Relative Strength Index (RSI) has moved to the neutral level of 43. Therefore, the pair will likely remain in the current range as traders wait for the latest ECB decision.
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