Daily Market Analysis By FXOpen

[FXOpen Trader]

Nikkei 225 Index Price Sets 34-year High


The price of the Nikkei 225 index is fixed above the level of 37,000 points. The last time this happened was after the index reached its all-time high in 1989.

The bullish behavior of the Japanese stock market has the following reasons:

→ Strong corporate reporting. In particular, SoftBank shares rose 11% due to increased sales of its subsidiary Arm, which develops chips for the development of artificial intelligence.
→ Dovish view of the Bank of Japan's monetary policy. Thus, Bank of Japan Vice Governor Shinichi Uchida said that the central bank will not aggressively tighten its monetary policy even if it ultimately decides to end negative interest rates.



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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). 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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Markets Await Publication of Key Macroeconomic Statistics from the US and UK


Tomorrow, January inflation data in the United States will be presented: the consumer price index in monthly terms is projected to slow from 0.3% to 0.2%, and in annual terms from 3.4% to 3.0%, the upper limit of the target range of the US Federal Reserve. The indicator excluding food and energy prices may be adjusted from 3.9% to 3.8%. With the opening of the American session, the focus will shift to January inflation data in the United States. Analysts do not expect significant fluctuations in the indicator, but still hope that the publication will become a new impetus for the early easing of monetary policy by the US Federal Reserve. Thus, experts expect that the consumer price index will decrease from 3.4% to 3.0% on an annual basis and from 0.3% to 0.2% on a monthly basis. Markets have almost completely revised expectations for the regulator's March meeting and are now inclined to believe that the interest rate will be adjusted by 25 basis points in May.

EUR/USD


The EUR/USD pair is showing moderate growth, developing upward dynamics since February 6. The euro is testing the 1.0790 mark for an upward breakout, updating local highs from February 2. Immediate resistance can be seen at 1.0805, an upward breakout could trigger an increase to 1.0897. On the downside, immediate support is seen at 1.0767, a break below could take the pair towards 1.0750.

At the same time, activity on the market remains quite restrained, and trading participants are in no hurry to open new positions ahead of the publication of macroeconomic statistics. On Wednesday, investors will evaluate the final data on eurozone GDP for the fourth quarter of 2023, as well as December statistics on industrial production. Forecasts suggest the region's economy will gain another 0.1% annual growth, while industrial output could fall 4.1% from -6.8% in the previous month. Last Friday, the eurozone published data on inflation in Germany: the consumer price index in January was 0.2%, the same as a month earlier, which coincided with market expectations, and in annual terms the figure remained at 2.9%.

Technical analysis of EUR/USD shows that a new upward channel has formed based on last week’s highs. 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 (excluding FXOpen EU). 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]

Volatility Leads To Pessimism Around UK's FTSE 100 Index


During the past few weeks, the FTSE 100 index, which consists of the stocks of the 100 most prestigious and well-established large corporations listed on the London Stock Exchange, has been somewhat volatile.

The foray into the new year so far has been a far cry from the same period last year, when euphoria among investors and analysts alike abounded during February 2023 due to London's long-established index having surpassed the 8,000 point mark for the first time in history.

Here we are now in February 2024, and things are somewhat different.

As trading begins for the new week ahead, there is a pessimistic tone to many analyses relating to the performance of the FTSE 100, especially compared to other indices comprising stocks listed on other globally recognised premium venues.

The overall performance of the FTSE 100 index since the beginning of 2024 has included a series of upward and downward movements; however, as this week began, the index was valued at 7,583 points as depicted by the bottom of the candlestick at 9.00 am UK time, according to the FXOpen chart, which is considerably lower than a top value of 7,711 on February 7.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). 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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Bitcoin Price Exceeds Psychological Level of $50k


The last time the BTC price was above $50,000 was in December 2021, making its way to the low around $15,500 reached in November 2022.

Reaching the $50,000 level was facilitated by:
→ waiting for the halving, after which the price of Bitcoin is believed to receive a bullish impulse due to a reduction in supply;
→ the effect of the approval of a Bitcoin ETF;
→ expectation of easing of the Fed's monetary policy, which increases interest in risky assets. By the way, the Nasdaq-100 technology stock index set a historical high yesterday, breaking the level of 18,000 points.

At the same time, the BTC/USD chart shows that:
→ the price of Bitcoin moves within an ascending channel (shown in blue), which dates back to last fall;
→ from the point of view of technical analysis, with this channel construction, the price of Bitcoin still has some room to rise to its upper limit.



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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). 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]

Major Currency Pairs in Consolidation Phase ahead of US Inflation Data Release


In mid-February, the volatility of major currency pairs slowed down somewhat. Leading Central Banks have taken a pause in changing monetary policy, and the incoming fundamental data is quite weak for the formation of new trends. As a result, the pound/US dollar pair was stuck between 1.2640-1.2520, the euro/US dollar pair found support just above 1.0700, and greenback buyers in the US dollar/yen pair managed to strengthen above 149. Nevertheless, the current flat movement may end this week. A lot of important fundamental data releases are expected in the coming trading sessions, which could lead to both the continuation of current trends and the formation of new trends.

GBP/USD

As the GBP/USD chart shows, the pound's decline at the beginning of this month, driven by a strong US employment report, slowed to 1.2520. On the weekly time frame, the price found support at the intertwined alligator lines. If the 1.2600-1.2520 range confirms support status, the price could retest the important 1.2800-1.2700 range. In case of a downward breakdown of the 1.2500 level, the pair may resume its downward movement in the direction of 1.2400-1.2200.

Today at 10:00 GMT+3, we are waiting for data on average wages in the UK for December last year, and at this time the change in employment and the unemployment rate for the same period will be published.



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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). 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]

S&P500 has been on a roll, but will it continue?


Over the past few months, the S&P 500 index has been growing in value in an almost linear fashion, taking the prestigious North American index, which tracks the performance of the largest companies whose stock is listed on exchanges in the United States, from a low point in October to its extremely high position of today.

On October 27 last year, the S&P 500 index languished at 4,117.9 points according to FXOpen charts, representing a dip in value accumulating as summer gave way to autumn last year.

Immediately after this took place, a rally began, which lasted until now, taking the S&P 500 index from that low point at the end of October to 5,027.8 at the close of the US trading session yesterday.

That is a remarkable figure indeed and is a high point that occurred following the market euphoria that took place at the end of last week when the S&P 500 index passed the 5,000-point mark, making it a record high for the prestigious index.

Overall, the S&P 500 has been growing in value tremendously when looked at over a longer period of time. According to some sources in mainstream media, the S&P 500 index increased by a remarkable 24% during 2023, despite its dip during the beginning of the first quarter.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). 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: Gold Price Takes Hit While Crude Oil Price Extends Rally


Gold price is declining below the $2,010 support zone. Crude oil price is rising and it could climb further higher toward the $80 resistance.

Important Takeaways for Gold and Oil Prices Analysis Today

• Gold price failed to clear the $2,032 resistance and corrected lower against the US Dollar.
• It traded below a short-term rising channel with support at $2,020 on the hourly chart of gold at FXOpen.
• Crude oil prices are moving higher above the $76.10 resistance zone.
• There is a key bullish trend line forming with support near $77.40 on the hourly chart of XTI/USD at FXOpen.

Gold Price Technical Analysis


On the hourly chart of Gold at FXOpen, the price was able to climb above the $2,020 resistance. The price even broke the $2,030 level before the bears appeared.

The price traded as high as $2,032 before there was a fresh decline, as mentioned in the previous analysis. There was a move below the $2,020 pivot zone. The price settled below the 50-hour simple moving average and RSI dipped below 30. Finally, it tested the $1,988 zone.

The price is now consolidating losses near the $1,990 level. Immediate resistance on the upside is near the $1,998 level or the 23.6% Fib retracement level of the downward move from the $2,031 swing high to the $1,988 low.

The next major resistance is near the 50-hour simple moving average and the 50% Fib retracement level of the downward move from the $2,031 swing high to the $1,988 low at $2,010.

An upside break above the $2,010 resistance could send Gold price toward $2,020. Any more gains may perhaps set the pace for an increase toward the $2,032 level. If there is no recovery wave, the price could continue to move down.

Initial support on the downside is near the $1,988 level. The first major support is $1,980. If there is a downside break below the $1,980 support, the price might decline further. In the stated case, the price might drop toward the $1,962 support.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). 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]

News about US Inflation Shake Markets


According to data published yesterday:
→ Core CPI: actual = 0.4%, expected = 0.3%, past values = 0.3%
→ CPI: actual = 0.3%, expected = 0.2%, past values = 0.3%

Thus, the statistics dealt a blow to the hopes of market participants that inflation in the United States is fading and the Fed will lower interest rates. The figures suggest that tight monetary policy will remain tight for longer.

The market reaction was a sharp rise in the price of the US dollar - accordingly, many exchange assets denominated in USD fell in price:
→ the EUR/USD rate fell by approximately 0.5%, setting a minimum for the year;
→ the price of E-mini futures for the S&P-500 index decreased by approximately 1.5%;
→ the price of E-mini futures for the Nasdaq-100 index decreased by approximately 2.0%;
→ the price of gold XAU/USD decreased by approximately 1.8%;
→ the price of bitcoins BTC/USD decreased by more than 3%, but this morning the cryptocurrencies have already managed to recover, thus winning back yesterday’s dump.

Also resistant to news about inflation in the United States was the price of oil XBR/USD, which is rising against the backdrop of a tense geopolitical situation.



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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). 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 Price Declining after Encouraging UK Inflation Data Release


After yesterday's disappointing US inflation data, market participants were wary of UK inflation data. But they turned out to be more favorable.

→ Core CPI: actual = 5.1%, expected = 5.2%, past values = 5.1%
→ CPI: actual = 4.0%, expected = 4.1%, past values = 4.0%

Although in absolute comparison the inflation rate in the UK is significantly higher than in the USA, it is encouraging that over the month it shows a downward trend.

This eases pressure on the Bank of England in its tight monetary policy, and therefore the British pound fell in value against other currencies. In particular, the decline against the USD that began yesterday continued. Since yesterday's high, the price of GBP/USD has already decreased by approximately 1%.

The GBP/USD chart shows that:
→ the bears have broken the upward trajectory indicated by the blue lines;
→ the price develops within the descending channel (shown in red);
→ the price dropped below the level of 1.25730, which served as support since February 8.



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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). 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]

EURGBP continues to be suppressed during February. Will it rise again?


The first few weeks of 2024 have been laden with discussion, analysis and speculation regarding the forthcoming position of the US economy, largely due to the United States authorities having been the first to speak publicly about any monetary policy changes for the year ahead, as well as a considerable number of perspectives having been aired in the public domain regarding the US Federal Reserve Bank being the first central bank responsible for major currency to lower interest rates - something which actually did not happen.

While the expected announcement of planned reductions in interest rates did not materialise, there has been a lot of comparison between the US economy, and in particular, the US Dollar and Europe's majors, the British Pound and the Euro.

What about the monetary situation and economic outlook on the European side of the Atlantic? Both the European Central Bank and the Bank of England have followed similar, highly conservative monetary policies to that of the Federal Reserve over the past two years, and therefore, it would have been likely that perhaps equal expectations of reductions of interest would ensue if the Federal Reserve had actually proceeded down the route that many analysts expected.

Now, with the US rates remaining the same, could it be that the European and British central bankers will follow the same path? Judging by the result of the European Central Bank policy meeting, which took place on January 25, at which it was decided that rates would remain unchanged, this appears to be the case so far.

Looking at the performance of the EURGBP pair makes for interesting research, given that this chart pattern shows the sentiment within the European Union member states and Britain, all regions where major currencies are the sovereign tender, but without any comparison to the United States.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). 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.