Daily Market Analysis By FXOpen

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GBP/USD Analysis: Pound Recovers After the Bank of England Decision

Yesterday, the Bank of England published its interest rate decision. According to ForexFactory, the votes were distributed as follows:

→ rate hike - 0 votes, cut - 2 votes, unchanged - 7 (0 - 2 - 7);

→ forecast: 0 - 0 - 9;

→ previous values: 0 - 1 - 8.

For the first time in the current cycle of interest rate hikes aimed at inflation lowering, two members of the Monetary Policy Committee voted in favour of the rate cut. The dovish tone was echoed by Bank of England Governor Andrew Bailey: “It is likely that we will need to cut the bank rate over coming quarters, possibly more so than is currently priced into markets.”

The market's first reaction to the clear signals of the imminent easing monetary policy was the weakening of the pound, including against the US dollar. Thus, yesterday, the GBP/USD rate dropped below the low of April 26 at around 1.245.

However:

→ the US dollar is also affected by the prospect of the Fed's easing monetary policy because the current tight policy puts pressure on the labour market - according to data from May 9, the number of applications for unemployment benefits in the US was the highest since November 2023;

→ Today's UK GDP data (which turned out to be better than expected) supported the pound.

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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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WTI Oil Price Recovers Quickly From March Lows

On May 8, the price of WTI crude oil fell below $77 per barrel for the first time since March 11. But on the morning of May 10, it was above $79 – an increase of almost 3% in less than two days.

Several factors contributed to the significant rise in the price of WTI crude oil. According to Reuters, among them:

→ Increased oil demand from the United States. Data released on Wednesday showed a drop in US crude oil inventories, driven by increased refinery utilisation.

→ Growing demand from China. Data published on Thursday showed an increase in oil imports.

→ Ongoing concerns about possible supply disruptions due to escalating conflict in the Middle East. Negotiations to end hostilities between Israel and Hamas failed, and Israel attacked the Palestinian city of Rafah.

On April 19, we wrote about the possibility of a bearish breakdown of the ascending channel line, which would be welcomed by the US administration, where the presidential elections are getting closer and closer.

Since then, the price of oil has broken down the median line and the support line at $80.70, which may act as resistance in the future.

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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 Regains Strength While Crude Oil Price Recovers

The gold price started a fresh increase above $2,320. Crude oil is recovering and might rise toward the $81.20 resistance zone.

Important Takeaways for Gold and Oil Price Analysis Today

• The gold price started a decent increase from the $2,300 zone against the US Dollar.
• It broke a key descending channel with resistance at $2,315 on the hourly chart of gold at FXOpen.
• Crude oil is recovering losses and trading above the $78.55 support.
• There was a break above a connecting bearish trendline with resistance near $78.40 on the hourly chart of XTI/USD at FXOpen.

Gold Price Technical Analysis

On the hourly chart of XAU/USD at FXOpen, the price formed support near the $2,275 zone, remained in a bullish zone, and started a strong increase above $2,300.

It broke a key descending channel with resistance at $2,315. The bulls even pushed the price above the $2,345 level and the 50-hour simple moving average. Finally, it traded as high as $2,358. XAU/USD is now consolidating gains near the $2,355 zone, and the RSI is above 70.

Initial support on the downside is near the 23.6% Fib retracement level of the upward move from the $2,307 swing low to the $2,358 high at $2,345.

The first major support is near the $2,335 zone. It is close to the 50% Fib retracement level of the upward move from the $2,307 swing low to the $2,358 high. If there is a downside break below the $2,335 support, the price might decline further.

In the stated case, the price might drop toward $2,320 and the 50-hour simple moving average.

Immediate resistance is near the $2,360 level. The next major resistance is near the $2,372 level. An upside break above the $2,372 resistance could send the gold price toward $2,385. Any more gains may perhaps set the pace for an increase toward the $2,400 level.

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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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Analytical Euro to Dollar Predictions for 2024-2025

The EUR/USD currency pair stands as a critical barometer of economic interactions and the relative strength between the Eurozone and the United States. This article delves into the recent history, economic outlooks, and analytical euro-to-dollar forecasts for this major currency pair in 2024 and 2025.

Recent EUR/USD History

From 2019 to the present, the EUR/USD currency pair has navigated through turbulent economic waters, influenced by a series of global events and differing monetary policies between Europe and the United States.

Initially, the euro experienced a gradual depreciation against the dollar, moving from around 1.14 at 2019’s open to close the year at 1.12. This was largely due to the European Central Bank's (ECB) continuation of its quantitative easing program, coupled with its persistently low interest rate of 0%.

The onset of the COVID-19 pandemic in early 2020 sent the euro tumbling further to a low of approximately 1.06 as panic gripped global markets. However, recovery was swift, and by September 2020, the euro had climbed to a high of about 1.20, bolstered by the US dollar's comparative weakness.

The euro fluctuated between 1.23 and 1.17 in the first half of 2021. However, inflation began to rise in both the Eurozone and US economy, but more so in the US. The anticipation of steep hikes by the Federal Reserve caused it to close near 1.13 by year's end.

TO VIEW THE FULL ANALYSIS, VISIT THE FXOPEN BLOG

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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Watch FXOpen's 6 - 10 May Weekly Market Wrap Video

Weekly Market Wrap With Gary Thomson: UK100, Hang Seng Index, AUD/JPY, GBP/USD, USD/CAD

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.

• UK100 Analysis: Stock Market Optimistic Ahead Of Bank Of England News
• The Hang Seng Index Has Risen By Over 13% In 2 Weeks
• AUD/JPY Analysis: Aussie Weakens After RBA Decision
• GBP/USD Bulls Struggle While USD/CAD Regains Strength

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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 #fxopenyoutube #fxopenint #weeklyvideo

 

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Gold Price (XAU/USD) Is Testing an Important Resistance Zone

On April 16, we wrote why the $2,380 zone is an important resistance area.

The XAU/USD chart shows that:

1) After fading fluctuations (they formed a narrowing consolidation triangle - shown in green), the price of gold dropped sharply (shown by a black arrow) on April 22-23.

2) Then, the price found support in the form of the lower border of the ascending channel (shown in blue), which has been in effect since the beginning of March. This led to the formation of another consolidation pattern between the blue lines.

3) An upward breakdown of the red lines on May 9 could be interpreted as an attempt by the bulls to resume the upward trend within the blue channel, but we could expect that the green triangle with its axis around 2380 would provide resistance.

TO VIEW THE FULL ANALYSIS, VISIT THE FXOPEN BLOG

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: EUR/USD Sees Green as USD/JPY Gains Bullish Traction

EUR/USD is slowly gaining traction above the 1.0800 level. USD/JPY trimmed almost all losses and showing positive signs above 156.20.

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

• The Euro started a decent increase above the 1.0750 pivot level.
• There is a key bullish trend line forming with support near 1.0800 on the hourly chart of EUR/USD at FXOpen.
• USD/JPY climbed higher above the 155.95 and 156.50 levels.
• There is a connecting bullish trend line forming with support near 156.20 on the hourly chart at FXOpen.

EUR/USD Technical Analysis

On the hourly chart of EUR/USD at FXOpen, the pair started a fresh increase from the 1.0725 zone. The Euro cleared a few key hurdles near 1.0750 to move into a positive zone against the US Dollar.

The pair settled above the 1.0800 level and the 50-hour simple moving average. A high was formed at 1.0830 and the pair is now consolidating gains. Immediate support is near the 23.6% Fib retracement level of the upward move from the 1.0775 swing low to the 1.0827 high at 1.0815.

The first major support on the EUR/USD chart is near 1.0800. There is also key bullish trend line forming with support near 1.0800 and the 50% Fib retracement level of the upward move from the 1.0775 swing low to the 1.0827 high.

The next key support is at 1.0790. If there is a downside break below 1.0790, the pair could drop toward 1.0750. The next support is near 1.0725, below which the pair could start a major decline.

On the upside, the pair is now facing resistance near the 1.0830 zone. The next major resistance is near 1.0850. An upside break above 1.0850 could set the pace for another increase. In the stated case, the pair might rise toward 1.0920.

TO VIEW THE FULL ANALYSIS, VISIT THE FXOPEN BLOG

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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The S&P 500 Index Has Reached a Significant Resistance Level

Analyzing the S&P 500 chart (US SPX 500 mini on FXOpen) on April 26, we wrote about how the April decline could be a correction to the lower boundary of the channel within the 2024 rally. Following this, a logical development would be for the bulls to attempt to resume the upward trend and make another attempt to breach the 5250 level.

Today, May 15, the price of the S&P 500 index (US SPX 500 mini on FXOpen) is at the 5250 level after a bullish breakout of the trendline (shown in red) that delineated the correction.

The price has risen by approximately 4.5% since the beginning of May as earnings season has not been disappointing, and traders anticipate the Federal Reserve will ease monetary policy.

Is further index growth possible?

Ben Snyder, Senior US Equity Market Strategist at Goldman Sachs, is positive in the long term but notes that:
→ the S&P 500 index has already surpassed the 5200 target level indicated by the bank's analysts;
→ an obvious risk of growth lies in the fact that companies may need to significantly raise profit forecasts.

Fundamental background has a significant influence on the dynamics of the S&P 500 index (US SPX 500 mini on FXOpen). For example, yesterday Producer Price Index (PPI) data was released. According to ForexFactory: PPI m/m actual = 0.5%, expected = 0.3%, a month ago = -0.1%.

The initial market reaction was a decline in the price of the S&P 500 index (US SPX 500 mini on FXOpen) – perhaps market participants were spooked by rising producer prices and the prospect of higher Fed rates. However, this was followed by a statement from Fed Chair Powell, who reassured the markets. According to him:
→ the next Fed move is unlikely to be a rate hike;
→ the PPI data is more "mixed than hot", considering that the previous period's data was revised downwards.

TO VIEW THE FULL ANALYSIS, VISIT THE FXOPEN BLOG

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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The Stock Price of PepsiСo (PEP) Is Retracting from Its Yearly High

On April 23, the quarterly report of PepsiCo's performance for the first quarter was published, which was awaited anxiously.

The issue stemmed from the fact that in December 2023, the U.S. Food and Drug Administration (FDA) announced the recall of over 40 Quaker Oats products – a company owned by PepsiCo – due to potential salmonella contamination. This led to a 22% decline in sales volume of Quaker Food products in the first quarter.

However, the report exceeded expectations:
→ Earnings per share: Actual = $1.16, Expected = $1.518;
→ Gross revenue: Actual = $18.25 billion, Expected = $18.08 billion.

By April 25, the stock price of PepsiCo (PEP) reached its yearly high, surpassing the $180 mark.

Then, this week, specifically May 13, the stock price of PepsiCo (PEP) hit a new yearly high, exceeding $181.

TO VIEW THE FULL ANALYSIS, VISIT THE FXOPEN BLOG

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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The US Dollar Is Weakening Following Inflation Data

Yesterday saw the release of key economic indicators for the US. According to ForexFactory:

→ Core Price Index (CPI) monthly: actual = 0.3%, expected = 0.4%, previous = 0.4%;

→ Core Price Index (CPI) annual: actual = 3.4%, expected = 3.4%, previous = 3.5%;

→ Retail Sales monthly: actual = 0.0%, expected = 0.4%, previous = 0.6%.

Concerns about rising inflation did not materialise. Reuters reports that unchanged retail sales suggest conditions are forming for interest rate cuts.

Financial markets reacted significantly, with the US dollar weakening:

→ As we reported yesterday, signs of slowing inflation increased market participants' belief in imminent rate cuts, leading to the S&P 500 stock index (US SPX 500 mini on FXOpen) reaching an all-time high;

→ Gold prices reached a high not seen since April 21;

→ Other currencies strengthened against the US dollar.

An interesting situation is developing on the USD/JPY chart. Applying Fibonacci ratios, we note three instances where price recovery halted around the 0.382 level:

→ Recovery from B to C following the impulsive decline from A to B;

→ Recovery from D to E after the impulsive decline from C to D;

→ Recovery from F to G after the 3-wave decline from A to F.

TO VIEW THE FULL ANALYSIS, VISIT THE FXOPEN BLOG

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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Dollar Adjusts After the Publication of Inflation Data in the US

Data on the Consumer Price Index (CPI) in the US, released yesterday, had a significant impact on the pricing of major currency pairs. According to the provided report:

• The core Consumer Price Index, which excludes food and energy costs, increased by 0.3% from the previous month, while experts had forecasted 0.4%.
• Retail sales remained unchanged at 0.0%, contrary to analysts' expectations of 0.4%.

As a result of the publication of such data, the dollar depreciated against almost all major currencies. For instance, the USD/JPY currency pair retreated from its peak at 156.60, the EUR/USD strengthened by more than 100 pips within a couple of hours, and buyers of the GBP/USD pair tested a significant resistance level at 1.2700.

The main reason for the sharp decline of the dollar against G-10 currencies is likely due to the possibility that slowing inflation growth and a weak labour market could prompt the Federal Reserve to change its monetary policy direction and reduce the base interest rate in the coming months.

USD/JPY

According to technical analysis of the USD/JPY pair on the daily timeframe, a "bearish engulfing" pattern has formed, the confirmation of which could contribute to a retest of the important area between 152.80-152.00. If dollar buyers manage to establish themselves above 154.90, the price may resume its upward movement towards recent highs around 156.00.

Macro-economic data that could influence the pricing of the pair in the upcoming trading sessions:

• Today at 15:30 (GMT +3:00), the number of initial jobless claims in the US.
• Today at 15:30 (GMT +3:00), the Philadelphia Fed Manufacturing Index (US).

TO VIEW THE FULL ANALYSIS, VISIT THE FXOPEN BLOG

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 Hits a Month's High, Breaking Key Resistance

Yesterday's release of CPI figures suggests that inflation is slowing down and a rate cut could be on the horizon. This weakened the dollar and boosted the value of assets priced in dollars, including BTC/USD.

As a result, the price of Bitcoin hit a May high.

Meanwhile, there is sustained demand in the market driven by institutional participants investing in Bitcoin ETFs. According to media reports citing 13F filings:
→ JP Morgan invested $731,246 USD
→ Wells Fargo invested $141,817 USD in Grayscale's GBTC.
→ Similar activity is observed with other traditional banks like BNP Paribas and BNY Mellon, indicating a broader industry trend.

TO VIEW THE FULL ANALYSIS, VISIT THE FXOPEN BLOG

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: AUD/USD and NZD/USD Set Sights on Additional Upside

AUD/USD started a decent increase above the 0.6655 resistance. NZD/USD is also rising and could aim for a move above the 0.6140 resistance.

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

• The Aussie Dollar found support at 0.6585 and recovered higher against the US Dollar.
• There is a major bullish trend line forming with support at 0.6670 on the hourly chart of AUD/USD at FXOpen.
• NZD/USD is consolidating gains above the 0.6100 support.
• There is a key bullish trend line forming with support at 0.6100 on the hourly chart of NZD/USD at FXOpen.

AUD/USD Technical Analysis

On the hourly chart of AUD/USD at FXOpen, the pair formed a base above 0.6585. The Aussie Dollar started a decent increase above the 0.6630 resistance against the US Dollar, as mentioned in the previous analysis.

The bulls pushed the pair above the 0.6655 resistance zone. There was a close above the 0.6685 resistance and the 50-hour simple moving average. Finally, the pair tested the 0.6715 zone. A high was formed at 0.6714 before the pair corrected gains.

It tested the 0.6655 zone and is currently consolidating gains. There was a fresh increase above the 23.6% Fib retracement level of the downward move from the 0.6714 swing high to the 0.6654 low.

On the upside, the AUD/USD chart indicates that the pair is now facing resistance near the 50% Fib retracement level of the downward move from the 0.6714 swing high to the 0.6654 low at 0.6685. The first major resistance might be 0.6715.

An upside break above the 0.6715 resistance might send the pair further higher. The next major resistance is near the 0.6750 level. Any more gains could clear the path for a move toward the 0.6800 resistance zone.

If not, the pair might correct lower. Immediate support is near a major bullish trend line at 0.6670. The next support could be 0.6655. If there is a downside break below the 0.6655 support, the pair could extend its decline toward the 0.6630 zone. Any more losses might signal a move toward 0.6585.

TO VIEW THE FULL ANALYSIS, VISIT THE FXOPEN BLOG

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.