Daily Market Analysis By FXOpen

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EUR/USD Analysis: The Rate Updates Its Multi-month Low

Never in its history has the euro fallen for 11 weeks in a row against the dollar, but it happened. The minimum has been set for 2023.

The reason seems to be that in an environment where central banks are raising rates to combat inflation, the US economy appears to be favored. Yesterday's batch of news confirmed this:
→ US ISM Manufacturing PMI index turned out to be higher than expected (actual = 49.0; forecast = 47.8; previous value = 47.6).
→ In his speech at a roundtable in Pennsylvania, the Fed chairman said: "Lots of good things happen," commenting on the strong labor market. Today, by the way, at 17:00 GMT+3 JOLTS data on the number of vacancies will be released, which can confirm the stability of the economy.

The attractiveness of USD is also affected by rising US government bond yields, as investors need dollars to buy them.

How long can the fall of the euro continue, which is already "settled" below the level of 1.05?

If the fundamental balance of power between the economies of Europe and the United States remains unchanged, the rate may reach the lower boundary of the bearish channel (shown in red).

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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.

 

[FXOpen Trader]

Top 5 Stocks to Watch in October:

Bank on the Backfoot, No Thirst for Coca-Cola, Tech Giant Takes Dip and Electric Vehicle Volatility

October is here, and as the markets enter a new month, we take a closer look at five stocks that could be of significant interest to investors.

1) Bank of America

Bank of America stock has taken a dive over the past weeks and entered October on a low point. Down from the high of $29 on September 14 to the mid $26 range at the close of business on the first trading day of October, it is now at its lowest point in six months. Yesterday, Bank of America stated that capitulation is a likely event when discussing the possibility of big drawdowns in October, and the sentiment of investors is reflected in these reduced share values. The company's CEO has said this week that he believes there will not be a recession, therefore giving rise to some investor confidence across the US markets.

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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.

 

[FXOpen Trader]

The American Currency Resumes Growth

The beginning of October turned out to be favourable for continued growth in the US dollar. From the data published yesterday, it follows that in September, the US manufacturing business activity index (PMI) rose to 49.0 against the forecast of 47.7. The ISM manufacturing employment index for the same period also turned out to be positive: 51.2 versus 48.3. Add to this the hawkish statements of the FOMC members who have spoken in recent days, and we can observe another upward impulse on the greenback.

NZD/USD

For commodity currencies, the current week is extremely rich in important fundamentals. This morning, the Reserve Bank of Australia met, tomorrow, the RBNZ will announce its verdict on the rate, and on Friday, the US employment report will be released.

According to analysts' forecasts, the New Zealand regulator will leave the rate unchanged, which may put additional pressure on the NZD/USD pair. On the weekly timeframe, we are seeing a rebound from the important level of 0.6000. If the current situation does not change, we can expect a renewal of the March low of this year at 0.5860. We can consider cancelling the downward scenario only after a confident consolidation above 0.6050.

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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.

 

[FXOpen Trader]

EUR/USD Tumbles While USD/JPY Seems Unstoppable

EUR/USD remained in a bearish zone and declined below 1.0530. USD/JPY is again rising and might climb toward the 150.00 level.

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

• The Euro started a fresh decline below the 1.0530 support zone.
• There is a short-term bearish trend line forming with resistance near 1.0475 on the hourly chart of EUR/USD at FXOpen.
• USD/JPY climbed higher above the 148.00 and 148.75 levels.
• There was a rejection noticed near a bearish trend line at 150.15 on the hourly chart at FXOpen.

EUR/USD Technical Analysis

On the hourly chart of EUR/USD at FXOpen, the pair remained in a bearish zone below the 1.0650 level, as mentioned in the previous analysis. The Euro declined below the 1.0530 support zone against the US Dollar.

The pair even settled below the 1.0500 zone and the 50-hour simple moving average. A low is formed near 1.0448 and the pair is now consolidating losses. On the upside, the pair is now facing resistance near a short-term bearish trend line at 1.0475.

The next key resistance is near the 50-hour simple moving average and the 23.6% Fib retracement level of the recent decline from the 1.0617 swing high to the 1.0448 low at 1.0485.

A clear move above the 1.0485 level could send the pair toward the 1.0530 resistance. It is close to the 50% Fib retracement level of the recent decline from the 1.0617 swing high to the 1.0448 low. An upside break above 1.0530 could set the pace for another increase. In the stated case, the pair might rise toward 1.0615.

If not, the pair might resume its decline. The first major support on the EUR/USD chart is near 1.0450. The next key support is at 1.0420. If there is a downside break below 1.0420, the pair could drop toward 1.0380. The next support is near 1.0335, 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.

 

[FXOpen Trader]

E-mini S&P 500 Falls to Lowest Since Early Summer

Job openings rose to 9.6 million in August, the highest level since April, the US Bureau of Labor Statistics reported yesterday. That's nearly 700,000 more than in July and well above the Dow Jones forecast of 8.8 million.

A strong labor market may indicate a growing economy, but why did E-mini S&P 500 futures fall to their lowest level since early summer? It's about the Fed's high rates.

A strong labor market makes the case for keeping rates high for longer to slow inflation to the 2% target. And high rates mean a decrease in the profitability of companies' businesses; accordingly, we see the development of bearish sentiment in the stock market. We wrote about this scenario in an analytical review on September 19, before the last FOMC meeting took place.

In addition, high Federal Reserve rates make bonds more attractive and portfolio managers, it can be assumed, are transferring capital from the stock market to bonds, as well as to cash (the dollar index hit a new high of the year yesterday).

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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.

 

[FXOpen Trader]

Fed Policymakers Ponder Prolonged High Rates Amidst Inflation Dilemma

The US Federal Reserve's persistent strategy of increasing interest rates to combat inflation and subsequently maintaining them at elevated levels has sparked a contentious debate in Western financial markets. While US Federal Reserve officials emphasise the necessity of a restrictive monetary policy to rein in inflation and bring it down to the Fed's 2% target, there remains an underlying dispute regarding the potential for another rate hike later this year.

It's crucial to note that inflation in the United States has been relatively well-contained for over a year, a far cry from the double-digit inflation still plaguing certain regions in Europe. Nevertheless, central bankers' approach to monetary policy remains notably conservative.

One of the paramount concerns facing the US economy is its staggering national debt, which surpasses that of most Western economies. Surprisingly, despite this financial burden, the US dollar continues to exhibit strength, notably gaining significant ground against the British pound in recent weeks.

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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.

 

[FXOpen Trader]

Yen and Commodity Currencies Hit Annual Lows

Yesterday, one could observe a continuation of the upward momentum in the dollar. Good data on the number of open vacancies in the US labour market from JOLTS allowed the USD/JPY pair to update its annual maximum at 150.00. The USD/CAD currency pair has strengthened above 1.3700, and the AUD/USD pair is approaching last year's extremes at 0.6200-0.6100.

USD/JPY

The American currency continues to hold its leading position in the first five-day trading period of October. But, since many pairs have reached important levels, corrective pullbacks from the main movements can be expected in the near future. Thus, the USD/JPY pair fell sharply yesterday after testing the psychological level of 150.00 and lost more than 250 points in just an hour. US dollar buyers very quickly returned the price above 149.00, but apparently, the range of 150.20-150.00 could become a serious obstacle to further growth of USD/JPY. A corrective downward pullback for the pair may be limited by recent extremes at 147.30-148.50.

Today at 15:15 GMT+3, we are waiting for preliminary data on employment in the US for September from ADR. A little later, the business activity index (PMI) in the US services sector for the same period will be released.

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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.

 

[FXOpen Trader]

WTI Oil Analysis: Price Falls 10% in Less Than a Week

In our article "Oil Analysis: Finally, A Bearish Reversal?" on September 21, we drew attention to emerging signs that the initiative was shifting to the bears. This was noticeable in the changes in the dynamics of impulses and corrections, as well as in the analysis of the interaction between trading volumes and prices.

Since then, the bulls were able to update the high of the year on September 28, but the price did not stay there for long, falling sharply in the following days. Three bearish candles formed on the chart, which confirmed the problems of the bulls, and the double top pattern (A-B) also became relevant.

Another principle of technical analysis that emphasized the dominance of supply over demand is that each upward move was approximately 2 times weaker than the downward move. This can be seen in the consistent structure characteristic of a bearish trend:

→ the C→D move is approximately 50% of the B→C bearish momentum;

→ the rebound from the median line of the ascending channel E→F is approximately 50% of the bearish impulse D→E;

→ the bounce from the (now former) support line 87.50 G→H is approximately 50% of the bearish momentum F→G.

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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.

 

[FXOpen Trader]

USD/CHF Analysis: Rate Rises to Its Highest in Six Months

This happened against the backdrop of rising US bond yields. Reuters writes that it is in the region of a 16-year high. It is reasonable to assume that big capital was balancing its defensive portfolio by selling the franc, considered a safe haven, and buying dollars to invest in American bonds, which also have high-quality status.

On July 13, we wrote that the franc could rebound from the lower line of the channel (shown in red). This was supposed to be facilitated by hawkish rhetoric from Fed officials and, as a result, the strengthening of the dollar.

However, now the situation has reversed. The USD/CHF rate expanded the range of a larger downward channel and reached its upper limit. It even tried to break out of it on October 3 (but without noticeable success).

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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.

 

[FXOpen Trader]

CEO Sells Shares, AAPL Price Underperforms Market

As it became known yesterday:

→ Tim Cook sold shares, selling 511k of his existing package of more than 3 million shares. For information: in 2023, he took a salary reduction of approximately 40%, but increased the size of the bonus (tied to the company's success) in the form of shares from 50% to 75%.
→ Investment bank KeyBanc Capital Markets downgraded AAPL shares. Analysts believe the company's sales will fall amid lower consumer spending.

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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.

 

[FXOpen Trader]

European Currencies Have Found a Short-term Bottom

A weak employment report from ADR and a decline in the US services PMI contributed to the start of a corrective pullback in major currency pairs. Thus, the EUR/USD pair went above 1.0500, the GBP/USD pair is forming a bullish engulfing combination, and the USD/JPY pair fell below 149.00.

GBP/USD

The decline of the British currency was interrupted after the publication of data on the business activity index in the UK services sector for September. The indicator showed impressive growth: 49.3 against the forecast of 47.2. The composite business activity index (PMI) also turned out to be positive: 48.5 versus 46.8. Such positive statistics allowed pound buyers to find support just above 1.2000 and close yesterday with a reversal 'bullish engulfing' combination. If today we receive confirmation of the indicated signal in the form of any white candle, the price may return to 1.2280-1.2300.

Today's news on the business activity index in the UK construction sector for September will be important for the pair's pricing. It is also worth paying attention to the speech of Ben Broadbent, a member of the Bank of England Monetary Policy Committee.

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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.

 

[FXOpen Trader]

AUD/USD and NZD/USD Aim Steady Recovery

AUD/USD is attempting a recovery wave from 0.6285. NZD/USD is also rising and facing a major hurdle near the 0.5980 level.

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

• The Aussie Dollar found support near 0.5870 and is now recovering against the US Dollar.
• There is a key rising channel forming with resistance near 0.6385 on the hourly chart of AUD/USD at FXOpen.
• NZD/USD is attempting a recovery wave above the 0.5930 resistance.
• There is a major bullish trend line forming with support near 0.5950 on the hourly chart of NZD/USD at FXOpen.

AUD/USD Technical Analysis

On the hourly chart of AUD/USD at FXOpen, the pair recovered above 0.6450. However, the Aussie Dollar failed to clear 0.6500 and started a fresh decline against the US Dollar.

The pair declined below the 0.6385 support. Finally, the bulls appeared near the 0.6285 zone. A low was formed near 0.6285 and the pair is now correcting losses. There was a move above the 23.6% Fib retracement level of the downward move from the 0.6500 swing high to the 0.6285 low.

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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.

 

[FXOpen Trader]

NFLX Analysis: Changes in Management, Price at Minimum

Yesterday, the NFLX share price dropped below USD 370, the lowest since late May of this year, and about -22% from the July peak.

Note that on July 6, we wrote that the NFLX stock price could meet resistance at USD 450 per share, and the signals from the chart gave bearish warnings. Just since July, the stock price began to perform worse than the broad S&P 500 market index.

Perhaps the company knows better about the reasons for the emerging negative dynamics and is making changes in management. This week it became known about the appointment of Amy Reinhard to the post of president of the company's advertising business. New product directors and technical directors were also appointed.

Will new executives help the stock return to its upward trajectory?

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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.

 

[FXOpen Trader]

USD/JPY Analysis: Psychological Level Changes the Price Sharply

On Tuesday, the US dollar rose above the psychological level of 150 for the first time since October 2022 before falling sharply to a low of 147.30 as the yen rose.

The media are discussing whether this movement confirms the fact of intervention on the part of the Japanese authorities.

On the one hand, there are opinions that the yen's movement on Tuesday was much smaller (about 1.7%) than when the authorities intervened last year (the change was about 4%) to support the yen.

On the other hand, there are no clear explanations about the reasons for the sharp movement — except as a manifestation of the authorities' interest in preventing excessive weakening of the national currency. Perhaps only about the influence of psychology when reaching and short-term exceeding the round figure — an effect that, by the way, is characteristic of the cryptocurrency 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.

 

[FXOpen Trader]

US Dollar Falls Ahead of Employment Data

EUR/USD

The EUR/USD pair shows mixed dynamics, remaining close to 1.0540. The European currency ended the last two trading sessions with moderate growth, which allowed the pair to retreat from the record lows of December 2022. The driver of the correctional dynamics was the expectation of the publication of the September report on the labour market in the United States. Analysts are currently forecasting a slight decline in new nonfarm payrolls from 187.0k to 170.0k. Average hourly wages in September could rise from 0.2% to 0.3%, while the annual figure will likely remain unchanged at 4.3%. The unemployment rate is expected to correct from 3.8% to 3.7%.

At the same time, trading participants have information from the Automatic Data Processing (ADP) company presented on Wednesday: in September, the dynamics of employment in the private sector slowed from 180.0k to 89.0k, which turned out to be significantly worse than the 153.0k expected by experts. A more confident growth of the single currency was hampered by statistics on foreign trade in Germany, published the day before: export volumes in August decreased by 1.2% after -1.9% in the previous month, while analysts expected -0.4%, and imports, by 0.4% after -1.3% with a forecast of growth of 0.5%. Against this background, the country's trade surplus decreased from 17.7 billion euros to 16.6 billion euros, which turned out to be better than expectations of 15.0 billion euros.

Based on the highs of two days, a new ascending channel has formed. Now, the price has moved away from the upper border of the channel and may continue to move towards the lower border.

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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.

 

[FXOpen Trader]

Israel Under Attack, Oil Prices Rise Sharply

On Friday, trading in WTI oil futures on the NYMEX closed at USD 82.81 per barrel. And on Monday morning, they opened at a price of USD 85.25 and began to quickly rise in price, reaching 87.24. Natural gas prices have also risen sharply.

The reason is Saturday's attack on Israel. And, of course, associations arise with the oil crisis of 1973, when Arab oil-producing countries refused to supply raw materials to the United States and other allies that supported Israel. Then the price of a barrel rose from USD 3 to 12 in six months.

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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.

 

[FXOpen Trader]

Geopolitical Tensions Rattle Markets: US Stocks Decline, Oil Surges Amid Israel-Gaza Conflict

The global financial landscape found itself in a state of flux as the military conflict between Israel and the Gaza Strip roiled markets. US stock futures faced downward pressure, while oil and Treasury values surged. Additionally, the September US jobs report added to the intensity, setting the stage for crucial inflation figures later in the week.

Despite thin trading conditions due to holidays in Japan and South Korea, the initial market sentiment favoured bonds and safe-haven assets like the Japanese yen and gold. Simultaneously, oil prices experienced a notable climb, surging by over $3 per barrel.

The Israeli shekel bore the initial brunt of the turmoil, plummeting to its lowest level since early 2015, standing at 3.9880 per dollar. While this may not immediately appear significant to traders due to the shekel's limited status as a major currency and unavailability on most platforms, it is intertwined with the potential performance of tech stocks listed on US exchanges, notably NASDAQ.

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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.

 

[FXOpen Trader]

GBP/USD Starts Recovery While USD/CAD Corrects Lower

GBP/USD started a recovery wave from the 1.2040 zone. USD/CAD is correcting gains and trading below the 1.3700 support.

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

• The British Pound is eyeing a fresh increase above the 1.2270 resistance.
• There is a connecting bullish trend line forming with support near 1.2180 on the hourly chart of GBP/USD at FXOpen.
• USD/CAD rallied toward the 1.3800 level before it started a downside correction.
• A declining channel is forming with resistance near 1.3700 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair accelerated lower below the 1.2200 zone. The British Pound even traded below the 1.2120 support against the US Dollar, as discussed in the previous analysis.

Finally, the bulls appeared near the 1.2040 zone. The pair is now attempting a recovery wave above the 50-hour simple moving average and 1.2120. There was a spike toward the 1.2270 resistance. A high has formed near 1.2261 and the pair is now consolidating gains.

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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.

 

[FXOpen Trader]

Economic Calendar: Markets Digest Events Happening in Israel

It's a busy start to the week as markets digest the events happening in Israel. Last week, WTI fell 10% to below $81 but gapped higher on this week's open, as wars in the Middle East add a risk premium to the price. With the OPEC report on Thursday, it looks set to be another volatile week in the oil markets.

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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.

 

[FXOpen Trader]

Natural Gas Price Reaches 8-month High

As the chart shows, yesterday, the price of gas rose above USD 3.60 for the first time since January of this year.

It can be assumed that events in Israel contributed to the price increase, since the Middle East is an important supplier of gas.

However, note that the bullish momentum started much earlier — gas prices have risen approximately 20% since the October 3 low. This confirms our assumptions about the bullish trend, which we published in the review on August 25th.

Perhaps the price of gas is influenced by seasonal factors and fears that weather conditions in the coming winter will be difficult.

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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.