DOW, DAX AND FTSE 100 SLIDES AS GLOBAL RISKS RISE

Global stocks, commodities, and commodities tumbled sharply on Monday as investors continued worrying about knock-on effects from China. The main concern is that Evergrande, the second-biggest real estate developer in the country will default on its obligations. Such a collapse has been compared with that of Lehman Brothers and Bear Sterns in the US. The company’s shares tumbled by another 10% today ahead of a key deadline on debt repayment. It faces another deadline on Thursday this week. In Europe, the expanded DAX index declined by more than 2.35% while the FTSE 100 index fell by more than 1.80%.

The FTSE 100 index declined sharply as concerns about energy prices and higher inflation rose. The concern happened as the price of natural gas continued rising. It has risen by more than 15% this month alone, meaning that Britons will need to pay higher energy costs. At the same, some companies have started to shut down their operations because of these costs. The government is also under pressure to save some of the smaller power providers in the country. This is happening a few days after data showed that the country’s inflation rose by 3.2% in August.

Cryptocurrency prices tumbled as the US dollar and the CBOE VIX index rose. The decline happened because of the risks brought by the Evergrande crisis and the ongoing negotiations on the US debt ceiling. The government will likely go through its first shutdown of the year if Congress can’t pass a bill to increase the debt ceiling. If Democrats and Republicans fail to raise the debt ceiling, the US will default on its obligations and have a lower credit rating. Bitcoin tumbled to $44,000 while Ethereum and Cardano fell by 10% and 6%, respectively.

EURUSD

The EURUSD pair declined sharply as global risks rose. The pair declined to 1.1700, which was the lowest level since August 23rd. On the hourly chart, the pair remains stubbornly below the 25-day and 50-day moving averages. It is also along the lower line of the Bollinger Bands while the Relative Strength Index (RSI) has moved to the oversold line. Therefore, the pair will likely keep falling with the next key level being at 1.1650.

GBPUSD

The GBPUSD pair declined sharply as investors remained concerned about the state of the UK economy. On the four-hour chart, the pair tumbled to the lowest level since August 27. It also moved below the short and longer-term moving averages while the Relative Strength Index (RSI) and MACD have moved to the lowest level in weeks. Therefore, the pair will likely keep falling in the near term.

USDCAD

The USDCAD pair rose to a high of 1.2846, which was the highest level since August 20. On the four-hour chart, the important resistance at 1.2760, which was the highest level on September 9. The price moved above the 25-day and 15-day moving averages. The RSI and MACD also rose to the highest level in weeks. Therefore, the pair will likely keep rising although a pullback is possible depending on the outlook of the Canadian election.