Daily Market Analysis By FXOpen

S&P 500 Falls amid News from the Fed


Yesterday was an important evening that had an impact on many financial markets. The Federal Reserve (as expected) kept the rate at the same level. According to Powell:

→ The full effect of tightening the monetary policy has yet to be felt.
→ [They] will continue to act cautiously, basing further decisions on incoming statistical data.
→ Inflation is much higher than the target.

Will the Fed tighten monetary policy further? Opinions are divided. JP Morgan analysts believe that the rate hike cycle is over. On the contrary, Vanguard analysts believe that rates will have to be raised again (and even more than once).

Perhaps the Fed's repeated rhetoric no longer looks like a sign of confidence? One way or another, the US stock market fell sharply, making the recession scenario more pressing.

On September 19, we wrote that the market was under bearish pressure ahead of the FOMC meeting. The graph shows that they managed to realize their advantage.



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Will Stagflation Persist in the UK? EUR/GBP Volatility May Be an Indicator


In recent years, the United Kingdom has found itself mired in a sea of economic uncertainty, prompting widespread speculation about the dreaded 'R-word'—recession.

While the nation has navigated a prolonged cost-of-living crisis marked by noticeable spikes in everyday expenses, mortgage payments, and other essential outlays, it has managed to avert an official recession thus far. However, lurking in the shadows is a different concern: stagflation.

Defining Stagflation

Stagflation, a term often used to describe an economic quagmire characterised by high inflation, low economic growth, and soaring unemployment, has begun to creep into discussions surrounding the UK's economic health. The conflicting signals emanating from the British economic landscape are creating a puzzle that demands careful examination.

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Central Bank Week Shakes Up Gold Market


Yesterday, the main event of the week took place — the Federal Reserve meeting, which had a noticeable impact on the market of assets denominated in US dollars. But besides the Fed meeting, there are a number of other events this week related to central banks:

→ today at 10:30, a meeting of the Swiss National Bank took place. The interest rate remained at 1.75%, although there was a significant possibility of its increase to 2%.
→ today at 14:00 GMT+3, a decision on the Bank of England interest rate is expected;
→ news from the Central Bank of Japan is planned for tomorrow morning — there may be surprises.



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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.

Oil Analysis: Finally, A Bearish Reversal?


The policy of OPEC+ countries to voluntarily reduce oil production was one of the drivers thanks to which the price of WTI oil increased by approximately 40% from its low in June. In such cases, it is appropriate to use the phrase “correction is overdue.”

So a decline from the week's high above USD 92 to current levels seems natural. Note that the reversal began with the appearance of extremely high trading volumes in oil futures on the NYMEX exchange on Tuesday — but what if capital associated with governments of countries that do not benefit from high oil prices, which are fueling already high inflation, entered the market? If so, then WTI oil prices above 90-91 can be considered a “red line” for them.

Bearish arguments:

→ the price increase B→C is near the Fibonacci level of 31.8% of the decrease A→B, which is acceptable for a natural rollback;
→ the psychological level of USD 90 (above which the rate of price growth has slowed down) can now act as resistance;
→ the price has broken through the median line of the uptrend — now resistance can be expected from it;
→ the level of USD 89 has also been broken by the bears — it is possible that it, in turn, will slow down the bulls’ attempts to win back, if any, occur. The rate of decline is being recorded too rapidly this week.



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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.

AUD/USD and NZD/USD Could Start Fresh Increase


AUD/USD declined below 0.6430 before it found support. NZD/USD is now recovering and eyeing an upside break above the 0.5950 resistance zone.

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

• The Aussie Dollar started a fresh decline from well above the 0.6450 level against the US Dollar.
• There is a key rising channel forming with resistance near 0.6450 on the hourly chart of AUD/USD at FXOpen.
• NZD/USD is attempting a recovery wave above the 0.5920 resistance.
• There is a major contracting triangle forming with resistance near 0.5940 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 the 0.6450 resistance. However, the Aussie Dollar failed to clear 0.6500 and started a fresh decline against the US Dollar.

The pair declined below the 0.6450 support. It even settled below 0.6430 and the 50-hour simple moving average. Finally, the bulls appeared near the 0.6385 zone. A low was formed near 0.6385 and the pair is now correcting losses.

There was a move above the 23.6% Fib retracement level of the downward move from the 0.6511 swing high to the 0.6385 low. On the upside, an immediate resistance is near the 50-hour simple moving average at 0.6430.

The first major resistance is near a rising channel at 0.6450. It coincides with the 50% Fib retracement level of the downward move from the 0.6511 swing high to the 0.6385 low.

A clear upside break above 0.6450 could send the pair toward 0.6510. The next major resistance on the AUD/USD chart is near 0.6540, above which the price could rise toward 0.6585. Any more gains might send the pair toward 0.6600.

On the downside, initial support is near the channel trend line at 0.6415. The next support could be 0.6385. Any more losses might send the pair toward 0.6350.

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USD/JPY Analysis: Rate Reaches Maximum of the Year


This morning, the Bank of Japan's decision on the interest rate, which has been kept at -0.1% since 2016, became known. The rate size remained unchanged.

Although surprises could occur due to the fact that inflation is still above the central bank's target of 2% for the 17th month in a row. So a tightening of policy is becoming more and more likely. CNBC writes that the Bank of Japan may be prompted to take this step by the weakness of the national currency.

This morning, as the chart shows, the rate has risen very close to the highs of the year. It is possible that it will be updated during the day today.

Bullish arguments:

The continuing difference in the monetary policies of the United States and Japan contributes to the growth of the exchange rate even higher.
The border of the current bullish channel has not been reached, the potential for growth remains.
Rising lows this week indicate stronger demand.
Even if the yen strengthens, the trend can be supported by both the median and the lower border of the ascending channel.



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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.

Market Analysis: EUR/USD, GBP/USD, and USD/JPY


At the US Federal Reserve meeting, officials expectedly kept the interest rate at 5.25–5.50%. According to the head of the regulator, Jerome Powell, tightening monetary policy is still possible if indicators begin to show negative dynamics again. At the same time, the US Federal Reserve aims to implement a program of gradually reducing the rate to 2.90% by 2026. Officials also intend to begin the gradual sale of bonds from their balance sheet, which are currently being purchased in the amount of USD 95.0 billion, of which USD 60.0 billion are government bonds, and another USD 35.0 billion are mortgage debt securities.

EUR/USD

The euro fell on Thursday but recovered slightly at the start of today's session. The US dollar weakened a day after the Federal Reserve signalled that US monetary policy would remain accommodative even longer. The Fed kept interest rates on hold Wednesday, in line with market expectations, but signalling that its officials are increasingly confident that aggressive policies can succeed in reducing inflation without crushing the economy or leading to large job losses. Along with another possible rate hike this year, the Fed's updated forecasts show significantly tighter rates through 2024 than previously expected. The US dollar index, which measures the currency against a basket of peers, was down 0.10% at 105.33 after rising to 105.74, its highest level since March. The immediate resistance of the EUR/USD pair can be seen at 1.0663, a breakout to the upside could trigger a rise towards 1.0702. On the downside, immediate support is seen at 1.0616, a break below could take the pair towards the 1.0584 direction.

At the lows of the week, a new downward channel has formed. Now, the price has moved away from the lower border of the channel and may continue to rise.

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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.

EUR/USD Analysis: Key Support Zone Resists Selling Pressure


Today, fresh monthly values of the PMI index, which is considered a leading indicator of the state of the economy, have become known:

• France: actual 43.6, expected 46.2. This is the worst economic contraction since the coronavirus.
• Germany: actual 39.8, expected 39.5.

As a reminder, values below 50 indicate a slowing economy.

Thus, the PMI witnessed the worsening economic problems in the European Union. And not only. The PMI indicator for the UK also published today was 44.2, which, although higher than the previous value 42.5, is still below 50.

The euro immediately reacted to the disappointing news. The exchange rate against the dollar fell to its lowest level in six months. However, then an encouraging recovery followed — apparently, the proximity of the rate to the key support zone had an effect.



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Watch FXOpen's 18 - 22 September Weekly Market Wrap Video

Weekly Market Wrap With Gary Thomson: UK STOCK MARKET RISES, S&P 500 FALLS, OIL ANALYSIS, EUR/GBP

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.

• UK stock market rises amid inflation news #UKStockMarket #UKinflation
• S&P 500 falls amid news from the Fed S&P500 #Fed
• Oil analysis: Finally, a bearish reversal? #Oil
• Will stagflation persist in the UK? EUR/GBP volatility may be an indicator #EURGBP #stagflation

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.




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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 Nosedives While USD/CAD Aims Higher


GBP/USD is gaining pace below 1.2300. USD/CAD is rising and might aim for a move above the 1.3520 resistance zone.

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

• The British Pound started a fresh decline below the 1.2500 support zone.
• There is a key bearish trend line forming with resistance near 1.2260 on the hourly chart of GBP/USD at FXOpen.
• USD/CAD is showing positive signs above the 1.3400 support zone.
• There is a major bullish trend line forming with support near 1.3450 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 1.2500 zone. The British Pound traded below the 1.2325 support to move into further a bearish zone against the US Dollar, as mentioned in the previous analysis.

The pair even traded below 1.2275 and the 50-hour simple moving average. Finally, the bulls appeared near the 1.2230 level. A low was formed near 1.2230 and the pair is now consolidating losses with bearish signs.

Immediate resistance on the upside is near a key bearish trend line at 1.2260. The first major resistance on the GBP/USD chart is near the 23.6% Fib retracement level of the downward move from the 1.2421 swing high to the 1.2230 low at 1.2275 and the 50-hour simple moving average.

A close above the 1.2275 resistance might spark a decent recovery wave. The next major resistance is near the 50% Fib retracement level of the downward move from the 1.2421 swing high to the 1.2230 low at 1.2325. Any more gains could lead the pair toward the 1.2375 resistance in the near term.

Initial support sits near 1.2230. The next major support sits at 1.2200, below which there is a risk of another sharp decline. In the stated case, the pair could drop toward 1.2120.

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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.