Hawkish Fed hits Bitcoin and UK retail sales up next
BTC/USD => The cryptocurrency falls 6% this week
GBP/CAD => The pair falls to a 3-week low
DAX => The index falls from 13700
BTC/USD set for a weekly loss
After rising over 6% last week, following cooler-than-forecast US inflation, Bitcoin has fallen this week, paring those gains. BTCUSD is on track to lose over 6% this week as it eases back from 25k after the minutes from the latest Fed meeting showed the Fed intends to keep hiking rates. Still, the cryptocurrency has shown little desire to fall meaningfully below 22,800, and at the same time, the upside appears to be capped by 23,870 as Bitcoin awaits its next catalyst, which could be from the Federal Reserve’s Jackson Hole Symposium next week. Fed Chair Jerome Powell could fire further hawkish comments across the market as the central bank focuses on reining in runaway inflation.
Where next for BTC/USD?
BTC/USD trades within a rising channel dating back to mid-June. After running into resistance around 25,200, the price has been easing lower, below the 20 sma. The long upper wick on the candles suggests that there was little acceptance at the higher prices. The RSI is neutral, giving away few clues. To continue the bullish trend, buyers will be looking for a move over 23800 the 20 sma before testing 25,200 once more. Sellers will look for a move below 23,200 the 50 sma and the lower band of the rising channel to bring 20,800, the late July low, into play.
GBP/CAD focuses on retail sales
GBP/CAD fell 0.4% in the previous session after weaker UK consumer spending data and as the loonie tracked oil prices higher. Oil rose over 2%, lifted by the much larger than expected draw in US oil inventories. Meanwhile, the pound came under pressure after data from the Office of National Statistics showed that consumer spending on credit and debit cards fell. Attention now shifts to retail sales from the UK and Canada. UK retail sales are expected to fall again after sharp declines in June as consumers rein in spending as inflation keeps rising. Canadian retail sales are expected to rise, but at a slower pace, as households also face rising prices.
UK retail sales Expected: -3.3% (2.5%) Previous: -5.8%
Canada retail sales Expected: 0.3% (1.9%) Previous: 2.2%
DAX looks to wholesale inflation figures
The DAX finished higher in the previous session paring some losses from the day before. However, the index is still set to book a weekly loss. The index pushed higher despite eurozone inflation surging to a record high, lifted by food and energy prices, instead supported by an announcement from Chancellor Olaf Schultz that sales tax on natural gas will temporarily be cut to 7% from 19% to help ease the burden on households and companies. Today the index is falling as attention turns to German wholesale inflation, which is expected to remain around a record high of over 30%. Hot wholesale inflation will add more pressure on the ECB to hike rates aggressively, which is bad news for stocks.
German PPI YoY Expected: 32%(0.8%) Previous: 32.7%
Support can be found at 13570 (20 sma) and 13270 (50 sma).
Resistance for the index can be seen at 14000 (round number) and 14600 (June high).