- Global stocks under pressure
- US dollar strengthens further
- Risk aversion on the commodity markets
The final session of the week brings a clear risk aversion. Stock indices in most countries fell sharply on Friday’s quadruple witching day. The German DAX fell over 1% and reached its lowest levels in two months. Negative sentiment also prevails in the US, where Dow Jones fell 0,50% to the lowest in 2-months and Nasdaq and S&P 500 dropped nearly 1%.
On the data front, both UK retail sales and US Michigan consumer sentiment disappointed which also weighs on market sentiment. Also news regarding Chinese developer Evergrande debt crisis may also contribute to unrest in the markets - much is said about the imminent bankruptcy that could be announced over the weekend. Some analysts compare the current situation to the Lehman Brothers bankruptcy in 2008 (the US bank then filed for bankruptcy on Monday) and this is certainly a topic worth attention.
Risk-off moods can be spotted also in commodity markets - crude oil and copper are losing ground. Gold and silver weaken in the face of a stronger dollar. The US currency appreciates against all major currencies, as a result EURUSD pair fell to 1.1730. The beginning of the weekend brings mixed sentiment in the crypto market. Bitcoin is gaining slightly, although other major cryptocurrencies are trading slightly lower.
Silver has been trading in a downward move since June. Last week buyers failed to break above the major resistance zone around $24.90 and the price pulled back. Yesterday the sell-off intensified and the price broke below $23.71 which coincides with the 200 SMA (red line). Today silver is approaching key support at $22.00 which is marked by the lower limit of the 1:1 structure and previous price reactions. Should break lower occur, downward correction may deepen towards next major support at $19.00. Source: xStation5
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