Solana's price is currently down by 10% on the weekly chart, with the altcoin nearly nullifying its gains from the previous week. The correction is taking place across the entire market, with the total crypto market cap down by 7.8% on Aug. 28.

SOL/USD on the weekly chart. Source: Trading View

Solana's open interest (OI) has declined by 12% over the past day. SOL’s 16% price drop in August has coincided with a weakening derivatives market, with OI dropping from a high of $2.83 billion to $2.08 billion.

Solana Open Interest chart. Source: Coinglass

Moreover, while spot netflow is negative for all assets, SOL has witnessed the largest selling pressure relative to market cap.

Crypto Spot Netflow chart. Source: Coinglass

That did not pan out, and based on historical market behavior, SOL will potentially retest $127 in the next few days, which is the lower limit of the accumulation zone.

SOL/USD on the daily chart. Source: Trading Vie

Source: Cointelegraph

The Mexican Peso (MXN) trades higher in its key pairs on Wednesday amid a cautiously optimistic market mood. European equities are trading modestly higher and the increasingly held view that the US Federal Reserve (Fed) will be able to lower interest rates in an orderly fashion – avoiding disruptions to the economy – is further buoying investor risk appetite. 

Several lower tier US data releases have come out over recent days that have painted a mixed picture and helped allay concerns the economy is heading for a hard landing. These include higher-than-expected Consumer Confidence in August and a surge in US Durable Goods Orders in July released Monday, though labor-market pessimism lingers and the Richmond Fed Manufacturing Index sank below estimates. 

Mexican Peso faces pressure from political factors

The Mexican Peso, meanwhile, has been pressured in recent sessions by a revival of the debate over reforms the new Morean-led government is planning for the Mexican judiciary. The proposed changes would make judges and magistrates elected by popular vote; critics say this will undermine justice, democracy and investor confidence in Mexico. ¡

Monday saw the new reforms voted through a committee for debate in the lower house in September when parliament opens, according to ABC News. Disagreement over the reforms has led to public demonstrations in Mexico City by members of the judiciary. The US ambassador to Mexico, Ken Salazar, said the “popular direct election of judges is a major risk to the functioning of Mexico's democracy.”

Salazar’s criticisms have led the Mexican government to “pause” diplomatic relations with both the US and Canada. If the stand-off escalates there is the potential for it to negatively impact free trade between the three countries with negative implications for the Mexican Peso. This would especially be the case should former-President Donald Trump win the presidential election.

The breakdown in diplomatic relations comes at a time where Mexico stands to potentially benefit from an escalating trade war between North America and China. News on Tuesday revealed, Canada has decided to increase tariffs on Chinese electric vehicle (EV) and steel imports, by 100% and 25%, respectively. 

The decision could benefit Mexico, however, because of its existing role as an intermediary manufacturer of Chinese EVs. These, destined for North America, are not subject to punitive tariffs because of the free-trade agreement that exists between the US, Canada and Mexico, according to Bloomberg News. 

Source: FXSTREET

The AUD/USD pair holds onto gains near the round-level figure of 0.6800 in Wednesday’s European session. The Aussie asset posts a fresh seven-month high of 0.6813 after a hotter-than-expected Australian monthly Consumer Price Index (CPI) for July kept market speculation for the Reserve Bank of Australia (RBA) to leave its Official Cash Rate (OCR) steady at 4.35% for the entire year alive.

The inflation date came in the early Asian session on Wednesday and showed that monthly CPI decelerated to 3.5% from 3.8% in June but remained higher than expectations of 3.5%, which appeared insufficient to bring RBA rate cut expectations on the table.

This week, the Australian Dollar (AUD) is expected to show more action as Aussie monthly Retail Sales data for July is lined up for release on Friday. Economists estimate that Retail Sales, a key measure of consumer spending that prompts price pressures, to have grown at a slower pace of 0.3% from 0.5% in June.

Meanwhile, the US Dollar (USD) regains temporary ground after posting a fresh year-to-date (YTD) low. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, delivers a mild recovery from 100.50 to near 100.85.

Investors see the US Dollar’s recovery as a short-lived pullback, with evidence that its near-term outlook is uncertain. The Greenback has remained under pressure as the Federal Reserve (Fed) seems to be prepared to start reducing interest rates from the September meeting, with uncertainty over the likely size by which the central bank will cut its key borrowing rates.

For fresh cues on interest rate cut path, investors await the United States (US) core Personal Consumption Expenditure Inflation (PCE) data for July, which will be published on Friday. The PCE Price Index report is expected to show that the annual core inflation rose by 2.7%, faster than June’s reading of 2.6%, with monthly figures growing steadily by 0.2%.

Source: FXSTREET

Source: AP

Scope for Australian Dollar (AUD) to edge higher, but any advance is likely limited to a test of 0.6815. In the longer run, outsized advance suggests further AUD strength; given the overbought conditions, it remains to be seen if 0.6870 is within reach, UOB Group FX strategists Quek Ser Leang and note.

The 0.6870 resistance may be out of reach

24-HOUR VIEW: “AUD traded between 0.6762 and 0.6796 yesterday, higher than our expected sideways trading range of 0.6750/0.6790. The price action has resulted in a slight increase in upward momentum. Today, there is scope for AUD to edge higher, but any advance is likely limited to a test of 0.6815. The major resistance at 0.6870 is unlikely to come under threat. On the downside, a breach of 0.6760 (minor support is at 0.6775) would indicate that the current mild upward pressure has eased.”

1-3 WEEKS VIEW: “Our update from Monday  is still valid. As indicated, while the outsized advance from last Friday suggests further AUD strength, given the overbought conditions, it remains to be seen if 0.6870 is within reach in the next 1 to 2 weeks. On the downside, if AUD breaks the ‘strong support’ at 0.6730 (level previously at 0.6710), it would suggest that it is not strengthening further.”

Source: FXSTREET

The Federal Reserve is widely expected to cut interest rates soon, which has boosted the appeal of gold. However, Daniel Ghali, a Senior Commodity Strategist at TDS, warns that a potential correction in gold prices is becoming more likely. Current investor positioning in gold has reached levels last seen during the pandemic, which often signals a market peak. Additionally, traders in silver are heavily positioned for gains, making both metals vulnerable to a sell-off if prices don’t break higher. Ghali cautions that the crowded market is a risk, hinting that a downturn could be on the horizon.

XAUUSD – W1 Timeframe

The weekly timeframe chart of XAUUSD presents a very interesting price action. The previous break of structure to create the new high left behind a demand zone, which I very much expect price to retest in the coming days. The presence of a trendline support provides a much-needed confluence in favor of the bullish sentiment.

XAUUSD – H3 Timeframe

In spite of the long-term sentiment being bullish, the price action on the 3-hour timeframe suggests that Gold price is likely to retrace over the next few days, in order to bring price into the demand zone. The trendline support, demand zone, bullish array of the moving averages, and the 200-period moving average all align in favor of the long-term bullish sentiment.

Analyst’s Expectations:

Direction: Bullish

Target: $ 2,532.68

Invalidation: $ 2,415

Source: ACTIONFOREX