(XTB Analysis Team)
The US Dollar has mostly dominated other currencies in recent times, pushing EUR/USD and GBP/USD to multi year lows while also maintaining its strength against safe haven currencies as the Bank of Japan attempts to limit the devaluation of the Yen through several interventions. However, a noticeable pullback occurred last week with the USD index as it dropped over 2,5% and reached the lowest level in around a month. Meanwhile, Wheat prices soared at the start of the week following a series of strikes across Ukraine and news that Russia withdrew from a UN-brokered deal on Ukrainian grain exports which once again raised concerns for the supply which has been in doubt since the beginning of the conflict. While the price pulled back from daily highs, it has held the majority of its gains and could continue to be volatile as general uncertainty surrounds the developments of the geopolitical situation. On the other hand, gold continues to struggle and started the week trading lower as it is attempting to break through the previous support area of $1640 after failing to extend the upward move which saw it reach a high of $1675 towards the end of last week. Despite this, the situation remains unclear and it remains to be seen if the price will manage to decisively move past this support area or if it will manage to rebound once again.
Bitcoin holds above $20,000 key level while USD attempts to rebound
Bitcoin finally managed to escape its short term trading range below the $20,000 level which acted as a resistance for the main crypto currency as interest in risky assets continued to be uncertain while central bank policies and troubling macroeconomic data impacted sentiment. The initial upward move which occurred around a week ago coincided with a significant drop in the value of the USD and was followed by a retest of the key psychological area which was defended and sparked another upward impulse which has led bitcoin to trade around $20,600 today. This week could be crucial for bitcoin and other risky assets performance as investors will be looking closely at the upcoming central bank decision in addition to Friday’s NFP report which will precede the US midterm election week. Either way, in addition to benefiting from an improvement in risk-on sentiment it will be essential for Bitcoin to remain above the aforementioned level as any major moves in either direction may lead to a cascading effect across alt coins and smaller cryptos.