Daily Market Analysis By FXOpen

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EURUSD Analysis: New Test for Support Level of 1.0500

Yesterday, another indicator of inflation in the United States was published — the CPI (Consumer Price Index). Like the PPI (Producer Price Index), the values of which were published on Wednesday, the CPI index indicated that inflation in the US remains stable (actual = 3.7%, forecast = 3.6%, a month earlier = 3.7%, two months earlier = 3.2%), however, this time, the reaction of market participants was sharper:
→ the stock market declined;
→ gold fell in price (although buyers in the Asian session on Friday contributed to the recovery);
→ the dollar index rose sharply.

Before the publication of news about inflation, the probability of a rate hike at the December Fed meeting was at 28%, but now it is 40%. The thesis “higher rates for a longer time” has returned to relevance.

For a technical analyst, changes in sentiment and spikes in volatility provide a new piece of valuable information. Let's take the EUR/USD chart for example.

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Watch FXOpen's 9 - 13 October Weekly Market Wrap Video

Weekly Market Wrap With Gary Thomson: OIL & ISRAEL-GAZA CONFLICT , S&P 500 POSITIVE, GOLD RISEN.

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of FXOpen UK, as he breaks down the most significant news reports and shares his expert insights.

• Geopolitical Tensions Rattle Markets: US Stocks Decline, Oil Surges Amid Israel-Gaza Conflict #Oil
• E-mini S&P 500 Positive Ahead of Earnings Season #eminiS&P500 #earningsseason
• Markets awaiting US inflation data #USinflation
• The price of gold has risen more than 5% since last Friday #Gold

Stay in the know and empower yourself with our short, yet power-packed video. Watch it now and stay updated with FXOpen.

Don't miss out on this invaluable opportunity to sharpen your trading skills and make informed decisions.

FXOpen YouTube


Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

#fxopen #fxopenyoutube #fxopenuk #fxopenint #weeklyvideo

 

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GBP/USD Restarts Decrease, EUR/GBP Aims Higher

GBP/USD started a fresh decline from the 1.2335 resistance zone. EUR/GBP is rising and might climb above the 0.8665 resistance.

Important Takeaways for GBP/USD and EUR/GBP Analysis Today

• The British Pound is again declining and trading below the 1.2200 support.
• There was a break below a key bullish trend line with support near 1.2220 on the hourly chart of GBP/USD at FXOpen.
• EUR/GBP is rising and trading above the 0.8650 zone.
• There was a break above a major bearish trend line with resistance near 0.8635 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair attempted a fresh increase above 1.2200. However, the British Pound failed above 1.2320 and started a fresh decline against the US Dollar.

There was a clear move below 1.2250 and the 50-hour simple moving average. The bears pushed the pair below a key bullish trend line with support near 1.2220. It opened the doors for a move toward the 1.2120 level.

A low is formed near 1.2122 and the pair is now consolidating losses. On the upside, the GBP/USD chart indicates that the pair is facing resistance near the 23.6% Fib retracement level of the downward move from the 1.2337 swing high to the 1.2122 low at 1.2175.

The next major resistance is near the 50-hour simple moving average at 1.2200. The main resistance could be the 50% Fib retracement level of the downward move from the 1.2337 swing high to the 1.2122 low at 1.2220.

A close above the 1.2220 resistance zone could open the doors for a move toward 1.2335. Any more gains might send GBP/USD toward 1.2450.

On the downside, there is a key support forming near 1.2120. If there is a downside break below the 1.2120 support, the pair could accelerate lower. The next major support is near the 1.2040 zone, below which the pair could test 1.2020. Any more losses could lead the pair toward the 1.2000 support.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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S&P500 Volatility: Is It 1987 All Over Again? Not Yet!

Just over a week has passed since global headlines were dominated by reports on the beginning of renewed and far more serious than usual conflict in Israel and Gaza, drawing attention away from various other subjects, be they social or financial.

The inundation of social media posts and news articles has become the norm, even affecting professional platforms like LinkedIn, where many are sharing personal accounts and opinions from near and far on the geopolitical situation rather than business-related content.

In such critical geopolitical moments, it's almost inevitable that financial markets experience some form of impact.

Last week, when European and American markets opened for trading after the conflict began, the NYSE and NASDAQ exchanges, along with the US dollar, experienced significant value gains. This surge can be attributed to the presence of military companies listed on American exchanges, which garnered investor confidence in anticipation of heightened demand.

However, as the conflict rages on with no sign of peace and escalating tensions, the S&P 500 index has seen a dip.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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In One Session, Price of Gold Rose by Approximately $60

The opening price on Friday was around 1,870, the closing price was around 1,930. The reason for the rapid growth of the XAU/USD quote is geopolitical tension. Israeli forces announced a ground operation in the Gaza Strip, which may be why before the weekend the markets were dominated by the forces of demand for gold as a defensive asset.

The Chinese Foreign Ministry said Israel's actions went beyond self-defense. And the famous investor Ray Dalio expressed the opinion that the risk of global war is 50% due to the situation in the Middle East.

The XAU/USD chart shows that the price of gold has reached the upper limit of the downward channel.

Technically:
→ the price of gold may encounter resistance from the upper border;
→ the price may roll back from the overbought zone, which is indicated by the stochastic oscillator;
→ the price may be supported by the psychological level of 1,900;
→ support may be provided by the level of 1,885; previously the price formed reversals from it.

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Dollar Consolidates Near Record Highs

In the US, the August budget report will be published today, followed by September data on retail sales and industrial production tomorrow. Experts expect a slowdown in production dynamics from 0.4% to 0.1%. Sales data could decline from 0.6% to 0.2%, while the ex-automotive figure could slow from 0.6% to 0.1%. The monthly budget report from the US Federal Reserve expects a deficit of USD 78.6 billion in August after a surplus of USD 89.0 billion the month before. Hawks do not rule out another increase in borrowing costs in November, but the main scenario at the moment seems to be maintaining a wait-and-see attitude, given the gradual decline in inflationary pressure.

EUR/USD

EUR/USD is showing weak growth, correcting after last week's bearish end, as a result of which the euro retreated from local lows of September 25. The pair is testing the 1.0525 mark for a breakout upward in anticipation of the emergence of new drivers on the market.

The focus of investors today will be the September statistics on the consumer price index in Italy: forecasts suggest that the indicator will remain at 0.2% monthly and 5.3% annual. Also, during the day, the EU will present August data on the dynamics of the trade balance. Investors are still trying to assess the prospects for further tightening of monetary policy by European and American regulators.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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Wall Street Awaits Earnings from Tesla and Netflix

According to Yahoo Finance, the third-quarter earnings season started well despite the uncertain macroeconomic environment.

Already, 32 companies in the S&P 500 have reported earnings, according to Bank of America Research's equity strategy group. Moreover:
→ actual earnings per share exceeded Wall Street expectations by an average of 9%;
→ EPS increased 1% compared to the same quarter last year, which is a positive sign.

This week's headliners could be reports from Tesla and Netflix, which are important components of the S&P 500 and Nasdaq indices.

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Bitcoin Tests Psychological Level of $30k

Paradoxically, cryptocurrencies, which conceptually pursue decentralization goals, have become overly sensitive to regulatory news.

Surprising news from Cointelegraph that the SEC would approve an application for a spot Bitcoin ETF from BlackRock raised the price of the coin to USD 30,000.

The market’s positivity was added by the opinion of SkyBridge Capital founder Anthony Scaramucci, who believes that Bitcoin’s capitalization can with ease reach USD 15 trillion due to the actions of the Fed and global de-dollarization.

On some crypto exchanges, the price of derivatives associated with the main cryptocurrency even significantly exceeded the psychological mark of USD 30k.

However, Cointelegraph later deleted the post.

And on Tuesday morning, the BTC/USD rate consolidated below 29k USD.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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Pound, Yen, and Euro Test Important Supports

The rise in the core consumer price index in the US, published last week, contributed to the start of a new upward impulse for the US dollar. European and commodity currencies interrupted the upward correction that began in early October and retested significant supports.

Thus, the GBP/USD currency pair almost reached 1.2100, the EUR/USD pair fell below 1.0500, and USD/JPY buyers lacked a couple of dozen points to update the recent high at 150.20. However, yesterday, greenback sellers managed to seize the initiative, and the American currency had to retreat from record highs of the current year. The continuation of recent trends will depend on the incoming fundamental data of the coming trading sessions.

USD/JPY

The failure of USD/JPY buyers to consolidate above 150.00 may lead to another downward impulse in the direction of 148.20-147.40. Over the past three weeks, the price has tried several times to overcome the resistance at 150.20-149.80, but as we see, to no avail. On the daily timeframe, we can see the formation of a double top pattern, which will be confirmed after moving below 147.40. At the moment, the pair is trading in a rather narrow flat corridor, to exit from which, most likely, a good news driver is needed.

Today at 15:30 GMT+3, we are waiting for the publication of data on the basic US retail sales index for September. Michelle Bowman, a member of the US Federal Open Market Committee (FOMC), is scheduled to speak a little later.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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EUR/USD Could Recover, USD/JPY Inches Toward 150.00

EUR/USD is slowly moving higher from the 1.0500 level. USD/JPY is rising and might soon attempt a move above the 150.00 resistance.

Important Takeaways for EUR/USD and USD/JPY Analysis Today

• The Euro started a decent increase above the 1.0570 pivot level.
• There is a key bullish trend line forming with support near 1.0570 on the hourly chart of EUR/USD at FXOpen.
• USD/JPY climbed higher above the 149.00 and 149.45 levels.
• There is a connecting bullish trend line forming with support near 149.45 on the hourly chart at FXOpen.

EUR/USD Technical Analysis

On the hourly chart of EUR/USD at FXOpen, the pair started a fresh decline from the 1.0640 zone. The Euro declined below the 1.0595 support zone against the US Dollar.

A low was formed near 1.0500 and the pair is now attempting a recovery wave. There was a break above the 50% Fib retracement level of the downward move from the 1.0639 swing high to the 1.0495 low.

The pair even settled above the 1.0570 zone and the 50-hour simple moving average. There is also a key bullish trend line forming with support near 1.0570.

On the upside, the pair is now facing resistance near the 61.8% Fib retracement level of the downward move from the 1.0639 swing high to the 1.0495 low at 1.0585. The next major resistance is near 1.0595. An upside break above 1.0595 could set the pace for another increase. In the stated case, the pair might rise toward 1.0640.

If not, the pair might start a fresh decline. The first major support on the EUR/USD chart is near 1.0570. The next key support is at 1.0530. If there is a downside break below 1.0530, the pair could drop toward 1.0500. The next support is near 1.0480, below which the pair could start a major decline.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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GBP/USD Analysis: Inflation Stabilises, Pound Rises in Price

UK inflation data was released this morning, showing that consumer price inflation (CPI) held steady at 6.7% in September, although economists had expected 6.6%, which would mean the CPI would continue to decline from its peak of 11.1%, achieved at the end of last year.

These data provide evidence to suggest that inflation has stalled. And the Bank of England will have to make another interest rate increase. Tighter monetary policy → more expensive currency. Therefore, the pound reacted to the news that inflation had not changed with short-term growth relative to other currencies.

On the GBP/USD chart, a picture emerges indicating that the pound has found important support at the level of 1.215. Judge for yourself:

→ On September 27, the rate dropped lower very uncertainly, but rose very confidently the next day;
→ On October 3, the dive below the level of 1.215 was more significant, but the recovery again was not long in coming. And the bulls were able to lift the GBP/USD rate from the October 4 low by more than 2%;
→ Long lower shadows on the candles (the most noticeable on October 6) indicate demand strength around 1.215;
→ Analysis of the price movement on October 13 shows that this horizontal continues to provide support.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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Major Currency Pairs Consolidating in Anticipation of Signals from the Fed

In the middle of the current five-day period, the main currency pairs continue to trade in rather narrow ranges. Most likely, investors and market participants are waiting for comments from Jerome Powell on further monetary policy as inflation continues to rise in the United States. The head of the Fed will speak tomorrow at 19:00 GMT+3; his statements on the economic situation in the United States and around the world may enhance or change existing market trends.

USD/CAD

The USD/CAD currency pair has been trading in a narrow corridor of 100 pips between 1.3700 and 1.3600 in recent trading sessions. The rise in oil prices is strengthening the Canadian dollar, while the hawkish Fed policy is keeping the pair close to the extremes of the current year. Technically, a price move below 1.3600 could contribute to a retest of the important 1.3420-1.3400 range. If greenback buyers break the resistance at 1.3780, the price may resume growth in the direction of 1.3900-1.4000.

Today at 15:30 GMT+3, we are waiting for data on the number of building permits issued in the United States for September. Weekly data on crude oil inventories will be published a little later. Also, at 19:00 GMT+3, it is worth paying attention to the speech of Christopher Waller from the Fed.

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NFLX Price Soars 12% after Strong Report

Yesterday's closing price was 345.83, but this morning, NFLX's price rose above USD 390 per share in premarket trading. The reason is a strong report:
→ earnings per share = USD 3.73, expected = USD 3.49;
→ revenue = USD 8.54 billion, a year ago = USD 7.9 billion.
→ the main surprise is that the number of subscribers grew by an impressive 8.76 million in the third quarter (about 6 million were expected). The number of subscribers worldwide is approaching 250 million.

Given the increase in demand for its service, Netflix has decided to raise the price of its basic plan in the US to USD 11.99 per month from USD 9.99, and raise the price of its premium subscription to USD 22.99 per month from USD 19.99. This could attract more earnings per share in the future, which is what has helped NFLX's price soar.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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On Factors Influencing the Price of Oil: Biden, Israel, Venezuela

Pushing off the lower boundary of the ascending channel, the price of Brent oil rose by more than 8% amid fears of an escalation of conflict in the Middle East, which should pose a problem both for the US economy, which suffers from high inflation, and for President Biden personally on the eve of the elections.

The situation is aggravated by the fact that oil reserves in US strategic storage facilities are near minimums since 2014. That is why:
→ it can be assumed that the goal of containing the rise in oil prices was one of the motives for Biden’s visit to Israel on Wednesday. It is expected that the price of oil may be affected by Biden's speech from the Oval Office, scheduled for Thursday evening 20:00 ET (or Friday night at 03:00 GMT+3);
→ the United States has eased sanctions against Venezuela, which has the largest oil reserves in the world.

From a technical analysis perspective, a rally from the October lows (B) after a decline from the September highs (A) may confirm that important divergent drivers are battling in the market.

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TSLA Stock Price Breaks 2023 Trend

According to the earnings report published yesterday:
→ Tesla's revenue for the 3rd quarter amounted to USD 23.35 billion, expected USD 24.18 billion;
→ earnings per share amounted to USD 0.66, expected USD 0.73.

That is, the actual numbers turned out to be worse than forecasts. But the main negative can be considered the statements of Elon Musk, according to which:
→ investors' expectations from Cybertruck should be moderated; it may take from a year to 18 months for a positive effect from this product. Although the company already has about 1 million applications, the company will be able to start producing about a quarter of a million cars per year approximately in 2025;
→ the company is currently pausing the construction of a plant in Mexico;
→ the policy of high interest rates has a great impact on the activities of both the company and the global economy.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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Consolidation of Major Currency Pairs Continues

The US dollar has resumed growth in almost all directions, but key levels have not yet been broken. Thus, the AUD/USD currency pair is approaching October lows just below 0.6300, the pound/US dollar has retested 1.2100, and the US dollar/yen is consolidating near 150.00.

USD/JPY

A possible Fed rate hike due to rising inflation, as well as good data on the core retail sales index and industrial production in the US, published at the beginning of the week, keep the pair from developing a full-fledged downward correction. At the same time, as we see, incoming data is not yet enough to consolidate above 150.00. Most likely, buyers need an additional news background to resume impulse growth. If the foundation of the next trading sessions is positive for the American currency, a renewal of the recent high at 150.20 and a resumption of growth in the direction of last year’s extremes at 151.80m may occur. We could consider cancelling the upward scenario if the pair falls below 147.80.

Today's speech by Fed Chairman Jerome Powell will be important for the pair's pricing. Tomorrow morning, you should pay attention to the publication of data on the national core consumer price index (CPI) in Japan.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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AUD/USD and NZD/USD Signal More Downsides

AUD/USD declined below the 0.6355 and 0.6330 support levels. NZD/USD is also moving lower and might trade below the 0.5800 zone.

Important Takeaways for AUD/USD and NZD/USD Analysis Today

• The Aussie Dollar started a fresh decline from well above the 0.6355 level against the US Dollar.
• There is a key bearish trend line forming with resistance near 0.6330 on the hourly chart of AUD/USD at FXOpen.
• NZD/USD declined steadily from the 0.5930 resistance zone.
• There is a connecting bearish trend line forming with resistance near 0.5840 on the hourly chart of NZD/USD at FXOpen.

AUD/USD Technical Analysis

On the hourly chart of AUD/USD at FXOpen, the pair struggled to clear the 0.6400 zone. The Aussie Dollar started a fresh decline below the 0.6355 support against the US Dollar.

The pair even settled below 0.6330 and the 50-hour simple moving average. A low was formed near 0.6295 before there was an upside correction. The pair climbed above the 50% Fib retracement level of the downward move from the 0.6393 swing high to the 0.6295 low.

However, the bears were active near the 0.6355 resistance zone. It failed to clear the 61.8% Fib retracement level of the downward move from the 0.6393 swing high to the 0.6295 low.

There is also a key bearish trend line forming with resistance near 0.6330. On the downside, initial support is near the 0.6295 low. The next support sits at 0.6285. If there is a downside break below 0.6285, the pair could extend its decline.

The next support could be 0.6250. Any more losses might send the pair toward the 0.6220 support. On the upside, an immediate resistance is near the trend line at 0.6330.

The next major resistance is near 0.6355, above which the price could rise toward 0.6400. Any more gains might send the pair toward 0.6420. A close above the 0.6420 level could start another steady increase in the near term. The next major resistance on the AUD/USD chart could be 0.6500.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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S&P 500 Analysis: Threat of an Important Support Breakdown is Growing

On September 19, we analysed the S&P 500 index, indicating that the market is under pressure. This was an important long term analysis, and let's see what has changed in a month with the news that happened yesterday.

A month ago we marked turning points A, B, C, D on the chart.

Since then, new turning points have appeared: E, F, G, H.

As we indicated, in the pulse sequence A→B, B→C, C→D, D→E, each subsequent pulse was 50% shorter than the previous one. The same observation is true for the E→F movement, which is the last in a series of contracting impulses. That is, the market either compressed into a spring or formed an important balance of supply and demand.

However, the F→G impulse violated this trend. This means that the market has left the state of balance in a bearish direction. At the same time, the channel expanded by 2 times (according to the principle of a parallel channel), and the market found new support G at its lower border. Further, it is important that the movement G→H amounted to 50% of the decline, which corresponds to a bullish corrective movement within the framework of the dominant downward trend (as you understand, the trend began when the market came out of balance).

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GBP/JPY Analysis: a Deceptive Calm

From early January to today, the GBP/JPY rate has risen by approximately 17%, driven by the Bank of Japan's ultra-loose policy of keeping rates below zero.

But since August, the upward trend began to weaken — perhaps faith in the pound was undermined by high inflation (the highest among the G7). This week:
→ data published on Wednesday showed that inflation in the UK has stabilized at 6.7%. In an interview with the Belfast Telegraph published on Friday, Andrew Bailey appeared calm when he said the Bank of England did not expect big changes in the data anyway;
→ retail sales data for September in the UK published on Friday turned out to be worse than expected: actual = -0.9%, expected = -0.3%, a month ago = +0.4%

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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Dollar Falls Amid Powell's Dovish Comments

Federal Reserve Chairman Jerome Powell's comments at the economic forum were seen as generally dovish. The strength of the US economy and ongoing tight labour markets could justify further rate hikes, Powell said. But he also noted that the recent market rise in bond yields has helped tighten overall financial conditions significantly.

The official's speech turned out to be quite cautious, and, in general, signalled more in favour of maintaining monetary policy without changes. However, answering questions, the chairman did not rule out the possibility of an additional increase in the interest rate, emphasising that the current value is not the maximum.

In addition, the day before the market paid attention to a block of macroeconomic statistics from the United States. Thus, the number of initial applications for unemployment benefits for the week of October 13 decreased from 211.0k to 198.0k, while analysts expected 212.0k, and the number of repeated applications for the week of October 6 rose from 1.705 million to 1.734 million, which turned out to be significantly higher than forecasts of 1.710 million.
Investors were also somewhat disappointed by sales in the secondary housing market: in September the figure decreased by 2.0% after -0.7% in the previous month, and in absolute terms the dynamics slowed down from 4.04 million to 3.96 million, while experts expected 3.89 million. The dollar index was last down 0.27% on the day at 106.24.

EUR/USD

The EUR/USD pair is declining slightly, consolidating near the 1.0575 mark. The day before, the pair showed active growth, having managed to update local highs from October 12, which was associated with the speech of the head of the US Federal Reserve, Jerome Powell. The euro added 0.42% to $1.0581. The immediate resistance can be seen at 1.0591, a breakout to the upside could trigger a rise towards 1.0601. On the downside, immediate support is seen at 1.0525, a break below could take the pair towards 1.0442.

The focus of investors today will be on September statistics on the dynamics of manufacturing inflation in Germany: in monthly terms the index is expected to slightly accelerate from 0.3% to 0.4%, and in annual terms — a decrease of 14.2% after -12.6% in the previous month.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.