US stocks retreat ahead of the latest Fed beige book

The Japanese yen was little changed after strong Japanese economic numbers. Data by the country’s statistics agency said that the country’s economy rebounded by 0.5% in the second quarter after falling by 0.9% in Q1. This growth translated to an annualized gain of 1.9%. The bureau attributed this strong performance to higher capital expenditure and private consumption. The capital expenditure increased by 2.3% while consumption rose by 0.9% Still, these numbers will likely not change the sentiment of the Bank of Japan, considering that the country is still suffering from a prolonged period of low inflation.

US stocks futures declined as investors continued worrying about the strength of the economy and the valuation of companies. S&P 500 futures declined by 0.5% while those tied to the Nasdaq 100 and Dow Jones dropped by about 0.3%. Stocks have lost steam recently as investors reflected on the weak jobs numbers that were published on Friday. Therefore, the market is waiting for cues from central banks on how they will handle a slowing economy while inflation remains high. The biggest corporate mover in the futures market was Coinbase, which is being sued by the SEC. Citrix, the virtual workspace company, rose after Paul Singer’s Elliot Management took a large stake in the company.

The sell-off in cryptocurrencies intensified, with the total market capitalization of coins tracked by CoinMarketCap, declined to $2.1 trillion. This is lower by about $200 billion than where it was early this week. Bitcoin declined to $45,000 while Ethereum is trading at $3,200. This decline was triggered by a buying the rumour and selling the news situation after El Salvador started accepting Bitcoin as a legal tender. The country also bought Bitcoin worth more than $20 million.

EURUSD

The EURUSD pair sell-off accelerated as investors started waiting for the upcoming statement by the European Central Bank. They are also looking ahead to the Fed’s beige book. It declined to 1.1815, which was the lowest level since September 1. On the four-hour chart, the pair has formed a head and shoulders pattern and moved below the lower line of the ascending channel pattern. The pair has also moved below the 25-day moving average. Therefore, the pair will likely keep falling, with the next key support being at 1.1750.

USDCHF

The USDCHF pair maintained a bullish trend as the dollar strength continued. On the four-hour chart, the pair rose to a high of 0.9215, which was the highest level since August 13. The pair is still between the key support and resistance levels at 0.9132 and 0.9232. It is still slightly above the 25-day moving average while the Relative Strength Index (RSI) has moved close to the overbought level. Therefore, the path of the least resistance for the pair is to the upside.

ETHUSD

The ETHUSD pair declined to a low of 3,206 as many traders rushed to the exit. This price was slightly above yesterday’s low of 3,015. On the four-hour chart, the pair moved below the short and longer-term moving averages. The MACD also moved slightly below the neutral line. Therefore, while the ongoing sell-off may accelerate, the pair may soon have a rebound as investors buy the dip.