Daily Market Analysis By FXOpen

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Market Analysis: Gold Falls from Record High by $100 in 1 Day

The record high of about USD 2,130 an ounce was set just after the weekend in low-liquid Asian markets. By the nature of the movement, it looked more like a cascading triggering of sellers’ stop losses, rather than finding a stable balance between supply and demand, since after the candle with a long upper tail, the quote began to fall. During the European session it fell to 2,060, and during the American session it fell to 2,030. So in less than a day, the price of gold fell about USD 100, making Monday's close further from the record top than Friday's close — essentially similar to a change in market sentiment, in which a bearish engulfing pattern is formed.

From a fundamental point of view, the gold market is influenced by:
→ Jerome Powell's words that expectations of a rate cut may be “premature”;
→ positioning traders at the beginning of the working week. Important news on the US labor market is expected on Friday.

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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: The end of a significant rally?

Opinions vary across the financial markets this morning as the S&P 500 index, a prestigious benchmark tracking the performance of 500 major US companies, takes centre stage in recent market discussions. Just days ago, on the first trading day of December, the S&P 500 soared to its highest point in over a year, capping off at 4,594.63 points.

This upward momentum persisted until yesterday morning when the US market concluded its session, witnessing a sudden tapering of the rally. While not indicative of a crash, the decline in the S&P 500's value has piqued the interest of financial analysts. The significance lies in whether this marks a temporary blip in the midst of a more extended upward trajectory or signals the conclusion of a sustained period of growth since its all-time high in 2022.

What adds intrigue to this scenario is the S&P 500's five-week upward trend, raising questions about the potential impact on the longer-term direction of the index. A critical point of comparison emerges when assessing these traditional 'bricks and mortar' stocks against the dynamic tech stocks listed on NASDAQ. The blue-chip Dow has recorded a modest 9% gain for the year, in stark contrast to the tech-heavy Nasdaq Composite's impressive 35% climb in 2023.

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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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USD/JPY, USD/CAD, and EUR/USD Analysis: The US Dollar Corrected in Anticipation of PMI Data Release

In the first trading hours of the current five-day period, the American currency made a number of attempts to regain the positions lost last week and begin an upward correction. Thus, the USD/JPY pair found support just above 146.00 and tested resistance at 147.50, USD/CAD buyers defended support at 1.3500, and the EUR/USD pair dropped to the important level of 1.0800 yesterday. Whether there will be a continuation of yesterday's movements can be understood after the release of the incoming fundamentals of the current five-day period.

USD/JPY

Growing expectations among market participants regarding a reduction in the Fed's base interest rate next year is pushing the USD/JPY pair to new lows. If data on inflation and the labour market in the US disappoint officials, the timing of changes in monetary policy could change dramatically, which in turn could return the USD/JPY pair above 150.00.

Today at 17:45 GMT+3, we are waiting for the publication of data on the business activity index (PMI) in the US services sector for November. A little later, at 18:00 GMT+3, indicators on the number of open vacancies on the US labour market for October and the Purchasing Managers' Index for the non-manufacturing sector from ISM will be released. Tomorrow we are waiting for a preliminary report on employment in the US from ADR.

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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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Gold Price Retreats From Highs and Crude Oil Price Dives

Gold price is correcting gains below the $2,050 support. Crude oil prices declined steadily below the $75.90 support and moved into a bearish zone.

Important Takeaways for Gold and Oil Prices Analysis Today

• Gold price rallied to new highs above $2,120 before it corrected lower against the US Dollar.
• A key bearish trend line is forming with resistance near $2,025 on the hourly chart of gold at FXOpen.
• Crude oil prices extended downsides below the $75 support zone.
• A major bearish trend line is forming with resistance near $73.35 on the hourly chart of XTI/USD at FXOpen.

Gold Price Technical Analysis

On the hourly chart of Gold at FXOpen, the price rallied heavily above the $2,000 resistance. The price even traded to a new high at $2,135 before there was a downside correction.

There was a move below the $2,072 support level. The bears even pushed the price below the $2,050 support and the 50-hour simple moving average. It tested the $2,010 zone. A low is formed near $2,009.78 and the price is now attempting a fresh increase.

It is now facing resistance near a key bearish trend line at $2,025. The next major resistance is near the 23.6% Fib retracement level of the downward move from the $2,135 swing high to the $2,009 low at $2,040.

The main resistance could be $2,050, above which the price could test the $2,072 resistance. The next major resistance is $2,135. An upside break above the $2,135 resistance could send Gold price toward $2,220. Any more gains may perhaps set the pace for an increase toward the $2,350 level.

Initial support on the downside is near the $2,010 level. The first major support is near the $2,000 level. If there is a downside break below the $2,000 support, the price might decline further. In the stated case, the price might drop toward the $1,965 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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WTI Oil Price Drops to Lowest Level Since July

As the chart shows, the price of a barrel of US crude oil dropped below 72.10 per barrel yesterday for the first time since July 2023.

Fundamentally, this happened against the backdrop of:

→ Statistics showing that US oil exports are increasing. Volume is approaching a record 6 million barrels per day, with flows to Europe and Asia showing steady growth.
→ Previously announced measures to reduce oil production by OPEC+. However, either the price has already taken these statements into account in advance, or market participants are not confident that the reduction in OPEC+ supplies will be fully implemented — one way or another, so far the OPEC+ countries have not achieved the desired increase in oil prices. Perhaps, in order to discuss the oil market, Russian President Putin is flying to the UAE and Saudi Arabia today. And Deputy Prime Minister Alexander Novak said OPEC+ is ready to deepen oil production cuts in the first quarter of 2024 to eliminate “speculation and volatility” if existing production reduction measures are not enough.

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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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Will rate hikes end when 2023 ends?

Finally, after a seemingly endless period of interest rate increases by the US Federal Reserve over the past few years, there is some degree of inkling that the rate rises may come to an end at the end of this year.

This morning, some mainstream media speculation has surfaced, considering that Federal Reserve officials are finally looking at making no further interest rate increases in 2024.

Currently, this is pure speculation based on some recent sentiment from the central bankers, and there has been some mention of a potential cessation in increasing interest rates in the last quarter of this year, which did not come to fruition. Instead, the current monetary policy continued, despite inflation now being very much under control and nowhere near the double-digit figures of two years ago, which caused the Federal Reserve (and other central banks in Western markets) to increase interest rates.

Therefore, the currency markets have responded accordingly. Rather than a sudden rise in the value of the US dollar, the British pound has been forging ahead.

In the period between November 9 and December 1, the British pound surged against the US dollar, going from 1.2290 to 1.27. Such gains are relatively rare among major currencies, and quite often, just a 1-cent difference is considered a notable movement.

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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, GBP/USD, USD/JPY Analysis: Dollar Stable Despite Weak Employment Data

Yesterday, statistics from the United States on the dynamics of open vacancies from JOLTS were published. In October, their number decreased by 617.0k to 8.733 million, which turned out to be the lowest result since the beginning of 2021, while analysts expected a reduction from 9.35 million to 9.30 million. Further cooling of the American labour market, along with the weakening of inflation risks, serves as a factor in favour of the expected completion of the cycle of tightening monetary policy by the US Federal Reserve. Some experts suggest that interest rate reductions will begin as early as March 2024.

November data on business activity in the services sector provided support to the American currency: the index from the Institute for Supply Management (ISM) rose from 51.8 points to 52.7 points, which turned out to be better than forecasts of 52.0 points. The US dollar index remains at 103.400.

On Friday, final labour market statistics for November will be published: analysts suggest that the number of new jobs created outside the agricultural sector will increase from 150.0k to 185.0k, unemployment will remain at 3.9%, and the average hourly wages will increase from 0.2% to 0.3% in monthly terms.
EUR/USD

According to the EUR/USD technical analysis, the pair shows mixed dynamics, consolidating near the 1.0800 mark and new local lows from November 14, updated the day before. Immediate resistance can be seen at 1.0836, a break higher could trigger a move towards 1.0878. On the downside, immediate support is seen at 1.0800, a break below could take the pair towards 1.0731.

European statistics on business activity turned out to be positive: the indicator in the non-manufacturing sector increased from 47.8 points to 48.7 points, exceeding expectations at 48.2 points, and the composite index - from 46.5 points to 47.6 points with a forecast of 47.1 points. The German services business activity index rose from 48.2 points to 49.6 points, and the composite index from 45.9 points to 47.8 points. Indicators remained stagnant, confirming that the eurozone economy is approaching recession, despite some recovery in consumption during the Christmas holidays.

The focus of investors today will be on October statistics from the eurozone on the dynamics of retail sales: in monthly terms, the indicator is expected to grow by 0.2% after a decrease of 0.3% a month earlier, and in annual terms - a decrease of 1.1% after -2,9%.

The downward channel is maintained. Now, the price is in the middle of the channel and may continue to 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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S&P 500 Analysis: Why Santa May Have Problems Rallying

It is traditionally believed that the Santa Rally occurs at the end of December and the first days of January, but according to many opinions it is acceptable to think that it begins much earlier.

At the beginning of December, the values of the S&P 500 index came close to the highs of the year in the area of 4,611, but have declined to date, forming a number of bearish signs:

→ the candle on November 29 has a long upper shadow — a sign of seller activity;
→ the same can be said about yesterday’s candle;
→ candles on December 1-4 form a bearish engulfing pattern;
→ all of the listed candles form a head-and-shoulders pattern (shown by the letters SHS).

That is, the chart indicates activation of sellers near the yearly high — and this is a problem that can affect the so-called Santa Claus rally (the active channel, shown in blue, actualizes the theme associated with the rally).

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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/JPY Analysis: Rate Falls to Important Support

This morning, the AUD/JPY rate dropped below 95.2 yen per Australian dollar for the first time since late October.

The weakening of the AUD was contributed by:
→ negative news regarding the Chinese economy. The Hang Seng Index set its 2023 low yesterday;
→ Australian GDP data published yesterday, which is growing at a weaker-than-expected pace.

And the strengthening of the yen occurs against the backdrop of expectations of an increase in interest rates in Japan, which intensified according to the statement of the head of the Bank of Japan. Kazuo Ueda said yesterday the central bank has several options for targeting interest rates once it gets short-term borrowing costs out of negative territory.

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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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NIKKEI Analysis: Japanese Stock Market Outlook

In the first half of 2023, the Japanese stock market was dominated by bullish sentiment due to (still) negative interest rates — while the rest of the G7 countries raised their rates to combat inflation.

The NIKKEI-225 index grew by 30% in the first half of the year. But then the balance of supply and demand was achieved, judging by the daily chart, where a range was formed (shown in blue), framing the index’s fluctuations in the second half of the year. Judging by the change in the slope of the bullish trend lines, demand was sufficient to maintain the price at the lower limit of the range, but not enough to go beyond the upper limit.

The situation is fundamentally reversed. While interest rates in the US, Europe and elsewhere are thought to be near the top, there is growing talk in Japan that the central bank will begin raising them after years of being stuck in negative territory:
→ Bloomberg: The next meeting of the Bank of Japan will be held on December 19 – speculation is growing that the Bank will move away from negative interest rates as early as this month.
→ Reuters: 22 of 26 economists (85%) surveyed in November believe the Bank of Japan will abandon its negative interest rate policy by the end of next year.

The winding down of ultra-loose monetary policy could have a negative impact on the growth of Japanese companies - accordingly, the growing bearish sentiment is reflected in the index quote. Since the end of November, the NIKKEI 225 has dropped almost 5%.

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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Watch FXOpen's 4 - 8 December Weekly Market Wrap Video

Weekly Market Wrap With Gary Thomson: AUD/JPY, RATE HIKES, S&P 500, WTI Oil

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.

• AUD/JPY: Rate Falls to Important Support #AUDJPY
• Will rate hikes end when 2023 ends? #RateHikes
• S&P 500: Why Santa May Have Problems Rallying #SantaRally
• WTI oil price drops to lowest level since July #wtioil

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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Sharp Change in BTC/USD Price: Causes and Consequences

On Monday morning, the price of bitcoin fell sharply. As the chart shows, the BTC/USD rate fell below 42,000 on Monday during the Asian session. According to Coinglass, the decline resulted in about $400 million worth of positions being liquidated by about 100,000 traders on cryptocurrency exchanges. So far, the price has found support around the 41,200 level, where the lower border of the ascending channel lies (shown in blue).

What are the reasons for such a sharp decline? From a fundamental point of view, there are no triggers with the media associated with, for example, statements by officials. What then?

First of all, the idea comes with low liquidity in the financial markets at the beginning of Monday in the Asian session. A recent example is the gold market, when the price of the metal jumped at the opening of trading to $2,130, but then quickly fell to $2,060. By the way, we wrote on Tuesday that the bears may try to push the price of gold below the psychological level of $2,000. The scenario is still coming true.

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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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Crude Oil Ends Freefall, but Is It Back in the Black?

In the early stretch of December, the WTI Crude Oil market experienced a sudden and substantial downturn, sending shockwaves through the financial landscape. From a robust $77.71 per barrel on November 29, the value plunged to just over $69.64 per barrel on December 6 at FXOpen. Analysts, in response to this decline, have employed dramatic language, with some describing the situation as a 'freefall.'

While the recent dip below the $70 mark raised concerns, a mild recovery has been observed, closing trading yesterday on the US market at $71.40 per barrel at FXOpen. Although this figure still falls short of the late November high, it highlights the current volatility in the oil market.

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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, GBP/USD, and USD/JPY Analysis: Dollar on the Rise amid Good US Employment Data

The US Federal Reserve will publish its interest rate decision on Wednesday, December 13th. The American regulator is not expected to take steps towards tightening or easing monetary policy, given the strong November labour market report published last Friday. Thus, the number of new jobs created by the American economy outside the agricultural sector increased by 199.0k after an increase of 150.0k in the previous month, while analysts expected 180.0k. At the same time, the unemployment rate decreased from 3.9 % to 3.7%, and the growth rate of average hourly wages accelerated from 0.2% to 0.4%.
The dollar was further supported by an increase in the consumer confidence index from the University of Michigan in December from 61.3 points to 69.4 points, which turned out to be significantly higher than expected 62.0 points.
EUR/USD

According to the EUR/USD technical analysis, the pair shows mixed dynamics, remaining close to 1.0760. Immediate resistance can be seen at 1.0789, a break higher could trigger a move towards 1.0842. On the downside, immediate support is seen at 1.0770, a break below could take the pair towards 1.0714.

Activity in the market remains quite low, as investors are in no hurry to open new trading positions ahead of the meetings of the world's leading central banks this week. So, on Thursday, meetings of the ECB, the Swiss National Bank, and the Bank of England will be held. Investors expect all regulators to maintain current monetary policy without changes, and special attention will be paid to the comments of their representatives, as well as the general tone of their statements.

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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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Market Analysis: GBP/USD Dips While USD/CAD Could Extend Gains

GBP/USD is moving lower from the 1.2650 resistance. USD/CAD is rising and might aim for more gains above the 1.3620 resistance.

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

• The British Pound started a fresh decline below the 1.2615 support zone.
• There is a key bearish trend line forming with resistance near 1.2565 on the hourly chart of GBP/USD at FXOpen.
• USD/CAD is showing positive signs above the 1.3580 support zone.
• There was a break above a major bearish trend line with resistance near 1.3585 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair started a fresh decline from the 1.2650 zone. The British Pound traded below the 1.2615 support to move into further a bearish zone against the US Dollar.

The pair even traded below 1.2565 and the 50-hour simple moving average. Finally, the bulls appeared near the 1.2515 level. A low was formed near 1.2514 and the pair is now attempting a recovery wave.

Immediate resistance on the upside is near a key bearish trend line at 1.2565 or the 50-hour simple moving average. It is close to the 50% Fib retracement level of the downward move from the 1.2615 swing high to the 1.2514 low.

The first major resistance on the GBP/USD chart is near the 76.4% Fib retracement level of the downward move from the 1.2615 swing high to the 1.2514 low at 1.2590.

A close above the 1.2590 resistance might spark a steady upward move. The next major resistance is near 1.2640. Any more gains could lead the pair toward the 1.2700 resistance in the near term.

Initial support sits near 1.2540. The next major support sits at 1.2515, below which there is a risk of another sharp decline. In the stated case, the pair could drop toward 1.2440.

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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: Price Approaches Important Support

In November, the 1.25 level acted as resistance, but after a bullish breakout, it began to provide support (as shown by the black arrows).

However, recent events are increasing bearish pressure. Among them:

→ yesterday's news on inflation in the US, the values of which were in line with expectations. It is worth paying attention to Core CPI MoM, the values of which remain equal to 0.3%, or 3.6% in annual terms. This category includes prices for services where inflation is difficult to overcome. So Powell's oft-repeated words that “the path to 2% will be difficult” take on more relevance. Today, by the way, another speech by the head of the Fed is scheduled for 22:30 GMT+3. It will take place after the announcement of interest rates at 22:00 GMT+3, which is expected to remain unchanged.
→ news today that the UK economy contracted in October. GDP decreased by -0.3%, although -0.1% was expected. This could strengthen the case that the Bank of England at its meeting (tomorrow at 15:00 GMT+3) will signal a faster rate cut than in other countries.

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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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Will the BoE Reduce Interest Rates or Not? Markets Appear Nonchalant

The Bank of England is expected to keep interest rates at the current level at tomorrow's meeting and is not actively pursuing further increases in the near future. More intriguingly, economists are now contemplating the possibility of a reduction in interest rates in the upcoming new year. This development, if realised, could carry noteworthy implications for both the British public and businesses.

The potential shift in policy is anticipated to be welcomed by a broad spectrum of the British populace, encompassing both commercial entities and private individuals. The prospect of reduced interest rates holds the promise of easing financial burdens, particularly on mortgage payments. Such a scenario would likely translate into increased disposable income for the public, empowering them to resume previous spending patterns. Simultaneously, businesses could find relief as lower interest rates would facilitate easier servicing of monthly commitments, allowing for redirected funds towards development, growth, and expansion initiatives.

Comparisons with the economic landscape of the United States reveal distinctive differences in approach. While both the UK and the US faced challenges of inflation surges, the UK's inflation rate, though reduced, remains at a level of just over 5.6%. In contrast, the US has achieved a lower inflation rate of 3.2%. Despite this, the Bank of England is diverging from the US policy trajectory by contemplating a departure from further interest rate hikes.

A key metric distinguishing the two economies is the national debt, with the UK presenting a substantially lower debt level on both a percentage and per capita basis. Furthermore, the absence of financial institution collapses, a contrast to events in the US earlier in the year, contributes to a relatively more stable financial environment in the UK.

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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, GBP/USD, USD/JPY Analysis: Dollar Falling ahead of Fed Report

At the upcoming meeting, the American department is not expected to take steps aimed at changing monetary parameters. At the same time, officials will likely abandon overly hawkish or dovish rhetoric and focus on incoming macroeconomic data. November inflation statistics were published yesterday: as expected, the rate of growth in consumer prices accelerated from 0.0% to 0.1% in monthly terms and slowed down from 3.2% to 3.1% in annual terms, and the figure does not take into account prices for food and energy adjusted from 0.2% to 0.3%. During the day, November statistics on manufacturing inflation will be published in the US: forecasts suggest a further slowdown in annual dynamics from 1.3% to 1.0%, while in monthly terms the indicator may show an increase of 0.1% after -0.5% in the previous month.
EUR/USD

The EUR/USD pair shows mixed trading dynamics, consolidating near the 1.0785 mark. According to the EUR/USD technical analysis, immediate resistance can be seen at 1.0822, a break higher could trigger a move towards 1.0842. On the downside, immediate support is seen at 1.0750, a break below could take the pair towards 1.0695.

Market activity remains subdued as market participants are hesitant to open new positions ahead of the US Federal Reserve's interest rate decision. The ECB will meet on Thursday. It is assumed that the regulator will also not change the parameters of monetary policy, but will indicate further maintaining the key interest rate at 4.50% for a long time. Today, investors will pay attention to the October statistics on industrial production in the eurozone: the indicator is expected to decline by 0.3% after -1.1% in the previous month, and in annual terms it may change from -6.9% to -4.6%.

During the week, a trading range formed with boundaries of 1.0723 and 1.0827. Now, the price has moved away from the upper limit and may continue to 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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Market Analysis: Powell's Speech Weakens USD

Yesterday, the Federal Reserve published a unanimous decision to leave the base rate unchanged for the third time in a row, which coincided with the expectations of most market participants. At the conference that followed, Powell's rhetoric was not as harsh as before. According to him:

→ economic activity is slowing, but the labor market remains strong;

→ inflation is still high, the Fed is committed to achieving the 2% target;

→ rates may rise if the US economy grows above expectations;

→ during discussions within the Fed, the topic of lowering rates becomes more relevant.

As a result, the increasingly clear prospect of rate cuts weakened the dollar greatly:

→ increased currency price relative to USD. The pound rose in price from the important support of 1.25, which we wrote about yesterday.

→ gold rose in price, again rising above the psychological level of $2,000 per ounce, as we expected in the analysis of December 5;

→ US stock indices rose in price.

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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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Natural Gas Prices Recover from 6-month Lows

Since November 1, the price of natural gas has fallen by more than 30%. This was facilitated by:
→ relatively mild weather at the beginning of the winter period;
→ record volumes of liquefied gas production, as reported by Reuters. Analysts estimate there is currently about 7.8% more gas in storage than normal for this time of year.

On December 13, the price of natural gas dropped below 2.20 for the first time since the beginning of June. This level may provide support given how price has interacted with it throughout 2023.

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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.