Daily Market Analysis By FXOpen

On Factors Influencing the Price of Oil: Biden, Israel, Venezuela


Pushing off the lower boundary of the ascending channel, the price of Brent oil rose by more than 8% amid fears of an escalation of conflict in the Middle East, which should pose a problem both for the US economy, which suffers from high inflation, and for President Biden personally on the eve of the elections.

The situation is aggravated by the fact that oil reserves in US strategic storage facilities are near minimums since 2014. That is why:
→ it can be assumed that the goal of containing the rise in oil prices was one of the motives for Biden’s visit to Israel on Wednesday. It is expected that the price of oil may be affected by Biden's speech from the Oval Office, scheduled for Thursday evening 20:00 ET (or Friday night at 03:00 GMT+3);
→ the United States has eased sanctions against Venezuela, which has the largest oil reserves in the world.

From a technical analysis perspective, a rally from the October lows (B) after a decline from the September highs (A) may confirm that important divergent drivers are battling in the market.



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TSLA Stock Price Breaks 2023 Trend


According to the earnings report published yesterday:
→ Tesla's revenue for the 3rd quarter amounted to USD 23.35 billion, expected USD 24.18 billion;
→ earnings per share amounted to USD 0.66, expected USD 0.73.

That is, the actual numbers turned out to be worse than forecasts. But the main negative can be considered the statements of Elon Musk, according to which:
→ investors' expectations from Cybertruck should be moderated; it may take from a year to 18 months for a positive effect from this product. Although the company already has about 1 million applications, the company will be able to start producing about a quarter of a million cars per year approximately in 2025;
→ the company is currently pausing the construction of a plant in Mexico;
→ the policy of high interest rates has a great impact on the activities of both the company and the global economy.



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Consolidation of Major Currency Pairs Continues


The US dollar has resumed growth in almost all directions, but key levels have not yet been broken. Thus, the AUD/USD currency pair is approaching October lows just below 0.6300, the pound/US dollar has retested 1.2100, and the US dollar/yen is consolidating near 150.00.

USD/JPY

A possible Fed rate hike due to rising inflation, as well as good data on the core retail sales index and industrial production in the US, published at the beginning of the week, keep the pair from developing a full-fledged downward correction. At the same time, as we see, incoming data is not yet enough to consolidate above 150.00. Most likely, buyers need an additional news background to resume impulse growth. If the foundation of the next trading sessions is positive for the American currency, a renewal of the recent high at 150.20 and a resumption of growth in the direction of last year’s extremes at 151.80m may occur. We could consider cancelling the upward scenario if the pair falls below 147.80.

Today's speech by Fed Chairman Jerome Powell will be important for the pair's pricing. Tomorrow morning, you should pay attention to the publication of data on the national core consumer price index (CPI) in Japan.



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AUD/USD and NZD/USD Signal More Downsides


AUD/USD declined below the 0.6355 and 0.6330 support levels. NZD/USD is also moving lower and might trade below the 0.5800 zone.

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

• The Aussie Dollar started a fresh decline from well above the 0.6355 level against the US Dollar.
• There is a key bearish trend line forming with resistance near 0.6330 on the hourly chart of AUD/USD at FXOpen.
• NZD/USD declined steadily from the 0.5930 resistance zone.
• There is a connecting bearish trend line forming with resistance near 0.5840 on the hourly chart of NZD/USD at FXOpen.

AUD/USD Technical Analysis


On the hourly chart of AUD/USD at FXOpen, the pair struggled to clear the 0.6400 zone. The Aussie Dollar started a fresh decline below the 0.6355 support against the US Dollar.

The pair even settled below 0.6330 and the 50-hour simple moving average. A low was formed near 0.6295 before there was an upside correction. The pair climbed above the 50% Fib retracement level of the downward move from the 0.6393 swing high to the 0.6295 low.

However, the bears were active near the 0.6355 resistance zone. It failed to clear the 61.8% Fib retracement level of the downward move from the 0.6393 swing high to the 0.6295 low.

There is also a key bearish trend line forming with resistance near 0.6330. On the downside, initial support is near the 0.6295 low. The next support sits at 0.6285. If there is a downside break below 0.6285, the pair could extend its decline.

The next support could be 0.6250. Any more losses might send the pair toward the 0.6220 support. On the upside, an immediate resistance is near the trend line at 0.6330.

The next major resistance is near 0.6355, above which the price could rise toward 0.6400. Any more gains might send the pair toward 0.6420. A close above the 0.6420 level could start another steady increase in the near term. The next major resistance on the AUD/USD chart could be 0.6500.

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S&P 500 Analysis: Threat of an Important Support Breakdown is Growing


On September 19, we analysed the S&P 500 index, indicating that the market is under pressure. This was an important long term analysis, and let's see what has changed in a month with the news that happened yesterday.

A month ago we marked turning points A, B, C, D on the chart.

Since then, new turning points have appeared: E, F, G, H.

As we indicated, in the pulse sequence A→B, B→C, C→D, D→E, each subsequent pulse was 50% shorter than the previous one. The same observation is true for the E→F movement, which is the last in a series of contracting impulses. That is, the market either compressed into a spring or formed an important balance of supply and demand.

However, the F→G impulse violated this trend. This means that the market has left the state of balance in a bearish direction. At the same time, the channel expanded by 2 times (according to the principle of a parallel channel), and the market found new support G at its lower border. Further, it is important that the movement G→H amounted to 50% of the decline, which corresponds to a bullish corrective movement within the framework of the dominant downward trend (as you understand, the trend began when the market came out of balance).



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GBP/JPY Analysis: a Deceptive Calm


From early January to today, the GBP/JPY rate has risen by approximately 17%, driven by the Bank of Japan's ultra-loose policy of keeping rates below zero.

But since August, the upward trend began to weaken — perhaps faith in the pound was undermined by high inflation (the highest among the G7). This week:
→ data published on Wednesday showed that inflation in the UK has stabilized at 6.7%. In an interview with the Belfast Telegraph published on Friday, Andrew Bailey appeared calm when he said the Bank of England did not expect big changes in the data anyway;
→ retail sales data for September in the UK published on Friday turned out to be worse than expected: actual = -0.9%, expected = -0.3%, a month ago = +0.4%




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Dollar Falls Amid Powell's Dovish Comments


Federal Reserve Chairman Jerome Powell's comments at the economic forum were seen as generally dovish. The strength of the US economy and ongoing tight labour markets could justify further rate hikes, Powell said. But he also noted that the recent market rise in bond yields has helped tighten overall financial conditions significantly.

The official's speech turned out to be quite cautious, and, in general, signalled more in favour of maintaining monetary policy without changes. However, answering questions, the chairman did not rule out the possibility of an additional increase in the interest rate, emphasising that the current value is not the maximum.

In addition, the day before the market paid attention to a block of macroeconomic statistics from the United States. Thus, the number of initial applications for unemployment benefits for the week of October 13 decreased from 211.0k to 198.0k, while analysts expected 212.0k, and the number of repeated applications for the week of October 6 rose from 1.705 million to 1.734 million, which turned out to be significantly higher than forecasts of 1.710 million.
Investors were also somewhat disappointed by sales in the secondary housing market: in September the figure decreased by 2.0% after -0.7% in the previous month, and in absolute terms the dynamics slowed down from 4.04 million to 3.96 million, while experts expected 3.89 million. The dollar index was last down 0.27% on the day at 106.24.

EUR/USD


The EUR/USD pair is declining slightly, consolidating near the 1.0575 mark. The day before, the pair showed active growth, having managed to update local highs from October 12, which was associated with the speech of the head of the US Federal Reserve, Jerome Powell. The euro added 0.42% to $1.0581. The immediate resistance can be seen at 1.0591, a breakout to the upside could trigger a rise towards 1.0601. On the downside, immediate support is seen at 1.0525, a break below could take the pair towards 1.0442.

The focus of investors today will be on September statistics on the dynamics of manufacturing inflation in Germany: in monthly terms the index is expected to slightly accelerate from 0.3% to 0.4%, and in annual terms — a decrease of 14.2% after -12.6% in the previous month.

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Watch FXOpen's 16 - 20 October Weekly Market Wrap Video

Weekly Market Wrap With Gary Thomson: POUND RISES, NASDAQ SEES A DIP, NFLX PRICE SOARS 12%, 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.

• Inflation Stabilizes, Pound Rises in Price #Inflation #GBP
• Volatility and Geopolitics Grip US Stocks as NASDAQ Sees a Dip #NASDAQ
• On Factors Influencing the Price of Oil: Biden, Israel, Venezuela #Oil
• NFLX price soars 12% after strong report #NFLX #Netflix #earningsreport

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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#fxopen #fxopenyoutube #fxopenuk #fxopenint #weeklyvideo

GBP/USD Attempts Recovery, USD/CAD Grinds Higher


GBP/USD is attempting a recovery wave from 1.2090. USD/CAD is rising and might aim for a move above the 1.3720 resistance zone.

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

• The British Pound is struggling to gain pace for a move above the 1.2200 region.
• There is a key bearish trend line forming with resistance near 1.2170 on the hourly chart of GBP/USD at FXOpen.
• USD/CAD is showing positive signs above the 1.3670 support zone.
• There is a bullish flag pattern forming with resistance near 1.3720 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 1.2200 zone. The British Pound traded below the 1.2140 support to move into further a bearish zone against the US Dollar, as mentioned in the previous analysis.

The pair even traded below 1.2115 and the 50-hour simple moving average. Finally, the bulls appeared near the 1.2090 level. A low was formed near 1.2093 and the pair is now attempting a short-term recovery wave.

There was a fresh upside above the 50-hour simple moving average. The pair climbed above the 50% Fib retracement level of the downward move from the 1.2191 swing high to the 1.2093 low.

Immediate resistance on the upside is near a key bearish trend line at 1.2170. It is close to the 76.4% Fib retracement level of the downward move from the 1.2191 swing high to the 1.2093 low. The first major resistance on the GBP/USD chart is near the 1.2190 level.

A close above the 1.2190 resistance might spark a decent recovery wave. The next major resistance is near the 1.2220 level. Any more gains could lead the pair toward the 1.2300 resistance in the near term.

Initial support sits near 1.2140. The next major support sits at 1.2115, below which there is a risk of another sharp decline. In the stated case, the pair could drop toward 1.2020.

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Bitcoin Breaks Psychological Level of $30k


On Friday-Sunday, the price of BTC/USD several times exceeded the round level of 30,000, but the excess was short-lived; soon, the price rolled back down. But the pressure of the bulls did not weaken, and since the beginning of Monday, the price of bitcoin rose above 37,000.

A combination of bullish factors contributed to the rise in bitcoin prices:
→ the threat of a financial crisis in the USA. Congress without a speaker, the budget has not been approved, the S&P-500 is near its 5-month low. Legendary investor Peter Schiff expresses the opinion that a crisis is inevitable due to the actions of the Fed.
→ Expectations that the SEC will approve a bitcoin ETF in the near future, and this will open bitcoin to institutional investors. According to JPMorgan, this will happen within a few months. Positive signals will come from BlackRock and VanEck, which have filed bids.
→ Refusal by the SEC to claim against Ripple Labs.
→ Geopolitical tensions in the Middle East. Bitcoin is gaining relevance as an asset that can become a safe haven for capital.



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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.