American stocks continued falling as investors refocused on the upcoming interest rate decision by the Federal Reserve. The Dow Jones crashed by more than 600 points on Monday after falling by 800 points on Friday. The tech-heavy Nasdaq 100 index declined below $11,000 while the small-cap heavy Russel 2000 declined by 4%. As stocks crashed, the CBOE volatility index jumped by over 20% while bond yields rose as the bond sell-off continued. Yield of the 10-year rose to 3.32% while the 2-year rose to 3.22%. Investors are concerned that the Fed will be more aggressive this week.
Cryptocurrencies tumbled as investors reacted to additional issues in the industry. The market cap of all cryptocurrencies crashed below $1 trillion for the first time in years. Bitcoin fell below $22,000 while Ethereum declined below $1,300. The decline was mostly because of the rising fear of monetary and fiscal crisis in the US and other developed countries. It also fell as investors reacted to the decision by Celsius to suspend withdrawals and swaps. Celsius is one of the biggest companies in the blockchain industry with billions in assets under management.
The British pound crashed sharply after weak economic numbers from the United Kingdom. On Monday, data by the ONS revealed that the economy was struggling. It experienced a contraction for the second straight month as consumer spending weakened. Manufacturing and industrial production declined sharply on a month-on-month basis. The next key catalyst will be the upcoming UK jobs numbers. With inflation rising, analysts expect the data to show that the unemployment rate continued dropping. The Bank of England will start its monetary meeting on Wednesday.
GBPUSD
The GBPUSD pair crashed hard after weak UK GDP numbers. It is now trading at 1.2190, which is substantially below last month’s high of 1.2560. The shares moved below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) dropped below the oversold level. Therefore, while the overall outlook is bearish, there is a likelihood that the pair will have a relief rally on Tuesday.
EURUSD
The EURUSD pair declined to a low of 1.0400, which was the lowest level since May 18. On the four-hour chart, the pair continued moving further below its 25-day and 50-day moving average. The RSI has moved below the oversold level. It also declined below the 23.6% Fibonacci retracement level. Therefore, the pair will likely continue falling as investors wait for the upcoming Fed interest rate decision.
USDJPY
The USDJPY pair rose to a multi-decade high as the Japanese yen sell-off continued. It rose to a high of 135.21, which was higher than the important support level at 131.37. On the daily chart, the pair moved above the 25-day and 50-day moving averages. The Relative Strength Index and the momentum oscillator continued rising. The pair will likely keep rising as bulls target the key resistance at 136.
