Daily Market Analysis By FXOpen

USD/JPY Analysis: Playing with Fire Continues


Yesterday, the Nikkei newspaper reported that the Bank of Japan is considering adjusting its yield curve control (YCC) policy.

This provoked a strengthening of the yen (1). The USD/JPY rate dropped to a two-week extreme of 148.8 per US dollar in anticipation of news from the Bank of Japan.

The news followed this morning (2). The Bank of Japan kept interest rates at -0.1% and also said the 1% ceiling on the benchmark 10-year yield would be an upper bound rather than a hard limit.

As a result of the Bank's decision, the USD/JPY rate returned to the area above 150 yen per US dollar.



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FTSE 100 Sees Modest Gains Despite BP's Earnings Dip and GBP Slump


In the early hours of trading, the FTSE 100 exhibited slight gains, although BP PLC's underwhelming performance during this earnings season limited further progress.

At 8:15 am, London's primary index rose by 7.44 points, marking a 0.1% increase and reaching 7,334.83, while the FTSE 250 experienced a more substantial increase of 64.64 points, equating to a 0.4% uptick and culminating at 17,082.23.

BP encountered a 4.1% decline after failing to meet City expectations for third-quarter profits. Weak results in gas marketing overshadowed the company's robust performance in oil trading. Adjusted net income for the third quarter was reported at $3.29 billion, down from $8.15 billion in the previous year but surpassing the $2.59 billion recorded in the prior period.

Richard Hunter, the head of markets at Interactive Investor, noted that there might be some room for disappointment, particularly in light of the market's anticipation of a $4.01 billion figure.

Vodafone Group PLC saw a 0.5% increase after confirming the sale of its Spanish business for a sum of up to €5 billion. Spectris PLC experienced a more notable rise of 2.8% following its forecast of top-end operating profits.

Rolls-Royce emerged as another strong performer, enjoying a 3.2% increase in its stock value. This surge was propelled by Barclays' decision to upgrade its rating from neutral to overweight while setting a price target of 270p.

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EUR/USD Resumes Drop, USD/JPY Extends Surge


EUR/USD is again moving lower below the 1.0615 support. USD/JPY surged and broke the 151.00 resistance zone.

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

• The Euro started a fresh decline below the 1.0675 support zone.
• There was a break below a key bullish trend line with support at 1.0570 on the hourly chart of EUR/USD at FXOpen.
• USD/JPY climbed higher above the 150.00 and 151.00 levels.
• There was a break above a major bearish trend line with resistance at 149.85 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 1.0700 level, as mentioned in the previous analysis. The Euro declined below the 1.0615 support zone against the US Dollar.

The pair even settled below the 1.0595 zone and the 50-hour simple moving average. More importantly, there was a break below a key bullish trend line with support at 1.0570. A low is formed near 1.0557 and the pair is now consolidating losses.

On the upside, the pair is now facing resistance near the 23.6% Fib retracement level of the recent decline from the 1.0675 swing high to the 1.0557 low at 1.0585.

The next key resistance is near the 50-hour simple moving average at 1.0595. The first key resistance is the 50% Fib retracement level of the recent decline from the 1.0675 swing high to the 1.0557 low at 1.0615.

A clear move above the 1.0615 level could send the pair toward the 1.0675 resistance. An upside break above 1.0675 could set the pace for another increase. In the stated case, the pair might rise toward 1.0750.

If not, the pair might resume its decline. The first major support on the EUR/USD chart is near 1.0560. The next key support is at 1.0525. If there is a downside break below 1.0525, the pair could drop toward 1.0500. The next support is near 1.0485, 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.

USD/CAD Analysis: New High of the Year


As the chart shows, yesterday, the USD/CAD rate exceeded 1.389 for the first time in 2023. This happened against the backdrop of news regarding the economies of the USA and Canada:

→ Statistics Canada estimates that GDP contracted in the third quarter. Technically, it can be stated that the Canadian economy has entered a technical recession, as this is the second consecutive negative change in GDP for the quarter.
→ The US Employment Cost Index rose 1.1% in the third quarter after rising 1.0% in the second quarter, the Labour Department reported Tuesday. This is a sign of a strong labour market, but at the same time, it indicates the preconditions for rising inflation, since the costs to the employer may fall on the consumer.

How the Fed assesses inflation will become known today at 21:30 GMT+3 from Powell’s speech. Also, volatility in the USD/CAD market may increase the speech of Bank of Canada Governor Tiff Macklem at 23:15 GMT+3.



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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.

Bank of England's November Interest Rate Decision and Its Potential Impact on the Pound


The British pound faces a crucial test as the Bank of England (BoE) prepares to announce its November interest rate decision. The outcome could significantly influence the pound's value, but several factors come into play.

If all members of the Monetary Policy Committee (MPC) vote to maintain the current interest rate, and there are no substantial alterations to inflation and growth forecasts, the pound may remain relatively unaffected. This decision aligns with market expectations and is unlikely to cause significant ripples in financial markets.

However, for forward-looking observers, the key focus will be on the guidance provided in the policy statement and the forecasts outlined in the Monetary Policy Report.

Some market sentiment suggests that the BoE might aim to maintain its 'high-for-longer' message, ensuring it remains the primary takeaway from November's policy statement. Such a message could lend support to the pound.

In recent times, there have been no upward adjustments to the base rate, accompanied by indications that rate cuts are not on the immediate horizon. This message may offer some upside for GBP, especially given the already modest expectations for further tightening.

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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.

S&P 500 Analysis: Powell Adds Bullish Momentum


As expected, the Fed left the rate unchanged. Market participants' attention was focused on Powell's press conference, as he said:
→ Risks have now become almost balanced;
→ Inflation expectations are at a good level.

The media publishes the opinions of experts who generally agree that although Jerome Powell has not ruled out the possibility of another rate increase, he does not seem to be very supportive of this idea. So the Fed is not as aggressive as it could be.

As a result, the probability of a rate hike in December has dropped to 20%, and the probability that the rate hike cycle has ended is at 70%.



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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.

Bitcoin Updates Its Maximum for the Year


The cryptocurrency market showed a correlation with the stock market, gaining bullish momentum amid softening rhetoric from the Federal Reserve.

The price of the main cryptocurrency reached USD 35,900 for the first time in 18 months.

Wherein:
→ the positivity is also due to expectations that the US Securities and Exchange Commission will approve a Bitcoin ETF. According to analysts at Bernstein (an asset management firm), this could happen by the first quarter of 2024.
→ according to the same analysts, the price of Bitcoin could reach USD 150k by 2025;
→ Jurrien Timmer, director of global macroeconomics at Fidelity, called bitcoin a commodity currency or exponential gold that aims to be a store of value and a hedge against monetary depreciation.



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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.

The Franc May Continue to Strengthen amid Low Inflation


Today it became known about the level of inflation in Switzerland. Compared to the US, UK, and other countries, Switzerland can boast of a CPI of only 0.1%. The minimal increase in prices is due to an increase in fuel costs due to the rise in oil prices in the second half of the year. Thus, the country’s economy provides more arguments in favor of the protected harbor status.

On October 5, we wrote that the Swiss franc was near an important resistance, forming an AB double top. After this, the rate fell by 2.5% to form the October low, and now the chart provides a new piece of information for analysis, in particular about the 0.909 level, which acts as an important resistance.

The USD/CHF price has interacted with it before (as shown by the arrows), but note:
→ the level was able to stop the sharp increase on October 31;
→ did not allow the price to reach the upper boundary of the ascending channel (shown in blue);
→ the price only briefly stayed higher. The bulls were unable to gain a foothold above 0.909, and the rate fell to the lower border of the 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.

AUD/USD and NZD/USD Show Signs of Life


AUD/USD is moving higher and might climb above 0.6450. NZD/USD is also rising and could extend its increase above the 0.5915 resistance zone.

Important Takeaways for AUD USD and NZD USD Analysis Today

• The Aussie Dollar started a fresh increase above the 0.6350 and 0.6400 levels against the US Dollar.
• There is a connecting bullish trend line forming with support near 0.6425 on the hourly chart of AUD/USD at FXOpen.
• NZD/USD is gaining bullish momentum above the 0.5870 support.
• There is a short-term contracting triangle forming with support near 0.5885 on the hourly chart of NZD/USD at FXOpen.

AUD/USD Technical Analysis


On the hourly chart of AUD/USD at FXOpen, the pair started a fresh increase from the 0.6320 support. The Aussie Dollar was able to clear the 0.6350 resistance to move into a positive zone against the US Dollar.

There was a close above the 0.6400 resistance and the 50-hour simple moving average. Finally, the pair tested the 0.6455 zone. A high is formed near 0.6456 and the pair is now consolidating gains.

On the downside, initial support is near the 23.6% Fib retracement level of the upward move from the 0.6318 swing low to the 0.6456 high at 0.6425. There is also a connecting bullish trend line forming with support near the same zone.

The next support could be the 50-hour simple moving average at 0.6400. If there is a downside break below the 0.6400 support, the pair could extend its decline toward the 76.4% Fib retracement level of the upward move from the 0.6318 swing low to the 0.6456 high at 0.6350.

Any more losses might signal a move toward 0.6320. On the upside, the AUD/USD chart indicates that the pair is now facing resistance near 0.6455.

The first major resistance might be 0.6480. An upside break above the 0.6480 resistance might send the pair further higher. The next major resistance is near the 0.6550 level. Any more gains could clear the path for a move toward the 0.6620 resistance zone.

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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.

S&P 500 Analysis: Best Week of the Year, Despite Bad News from Labour Market


According to Friday's data, in the US:
→ the unemployment rate rose to 3.9% (expected = 3.8%). The last time the level was this high was in February 2022.
→ the number of workers employed in the non-agricultural sector increased over the month by only 150k (+178k expected). The last time the figure was below 150k was in February 2021.

Published negative data clearly indicate a cooling of the labour market. Why then did the E-mini S&P-500 futures price end the week up about 5.5%, marking the best week of 2023?

The point is that market participants are increasingly convinced that the Fed will no longer tighten monetary policy. That is, interest rates have peaked, the next step should be to ease them, which will allow companies to grow.



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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.