Daily Market Analysis By FXOpen

American Currency Adjusts Ahead of Jerome Powell’s Speech


A rather weak employment report, published late last week, contributed to the weakening of the American dollar. According to the published data:

• The unemployment rate in June increased to 4.1% (experts’ forecast: 4.0%);
• The actual number of new jobs was slightly higher than analysts predicted (206K vs 191K).

According to Bloomberg Economics experts, the US labour market is starting to slow down significantly, which could prompt the Federal Reserve to cut rates as early as the September meeting. It is quite possible that more clues about the Fed’s future monetary policy will be provided to market participants by the end of the week, as important press conferences and macroeconomic data releases are expected in the upcoming trading sessions.

USD/JPY


Technical analysis of the USD/JPY pair indicates the possibility of a continued downward correction, as a "bearish engulfing" pattern has formed on the daily timeframe. The pattern can be considered partially worked out, as the price has decreased by more than 100 pips and has almost tested the significant support at 160.00 since it formed on the chart.

The price behaviour in the 160.30-159.80 range will demonstrate the sellers' strength. If the price consolidates below this range, the downward movement may resume with renewed vigour. Conversely, if the pair rises above 162.00, it could lead to the start of a new upward impulse.

The following events could impact the pair's price:

• Today at 17:00 (GMT +3): Speech by Federal Reserve Chairman Jerome Powell;
• Today at 17:00 (GMT +3): Speech by US Treasury Secretary Janet Yellen.

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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.

Analysis of NZD/USD: The "kiwi" sharply fell after the central bank's decision


The Reserve Bank of New Zealand (RBNZ) kept the interest rate unchanged at 5.5% on Wednesday.

The decision to maintain the interest rate was anticipated. However, market participants noted a shift in the tone of the RBNZ's official statements. In May, the bank indicated that the tight policy would continue as long as necessary, but now it is open to easing the restrictive monetary policy if inflation slows down.

As a result, market participants are now considering the possibility of a nearer-term rate cut, which led to a decline in the New Zealand dollar relative to other currencies.

Specifically, against the US dollar, the "kiwi" fell by approximately 0.75%.

Will the decline continue as the situation develops?



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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.

Analysts Raise NVDA Forecasts, Stock Price Rises


According to FactSet, in July, seven reputable analysts have raised their target prices for NVDA stock. KeyBanc analyst John Vinh, for instance, increased his target from $130 to $180 (approximately 33% above the current price).

Following these target increases, Nvidia's stock has risen, closing above the psychological level of $130 yesterday for the first time since June 20. Consequently, NVDA's price has increased by more than 160% since the start of the year.

Will Nvidia's rally continue?

The NVDA chart data raises doubts about the stock's ability to confidently set new historical highs as it did in the first half of the year.


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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.

Market Analysis: EUR/USD Jumps, USD/JPY Bulls Seem Unstoppable


EUR/USD is climbing higher above the 1.0800 level. USD/JPY surged above the 160.00 and 161.40 resistance levels.

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

• The Euro started a decent increase above the 1.0780 pivot level.
• There is a key bullish trend line forming with support near 1.0820 on the hourly chart of EUR/USD at FXOpen.
• USD/JPY climbed higher above the 160.50 and 161.40 levels.
• There is a connecting bullish trend line forming with support near 161.55 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 1.0710 zone. The Euro cleared a few key hurdles near 1.0780 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 1.0845 and the pair is now consolidating gains. There was a test of the 23.6% Fib retracement level of the upward move from the 1.0710 swing low to the 1.0845 high.

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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.

Markets Awaiting US Inflation Data: What is the Probability of Trend Reversals?


The major currency pairs are in a holding pattern following the release of the latest US labour market data and Jerome Powell's testimony before Congress. The Fed Chair noted that the Federal Reserve has made "significant progress" in its mission to combat inflation, but emphasized the need for "more good data" before lowering interest rates. Judging by the movements of the major currency pairs, the market appears sceptical of the Fed Chair's statements:

• The AUD/USD pair has refreshed the May highs of the current year and strengthened above 0.6700.
• The USD/CAD pair is trading near strategic support at 1.3610.
• The GBP/USD pair is approaching the March highs near 1.2900.

As we can see, the US dollar is slowly but surely losing ground in many directions, but by the end of the week, existing trends could either slow down or change direction dramatically.

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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.

GBP/USD Hits Four-Month High Following GDP Growth News


day, the UK Office for National Statistics published data showing an increase in GDP.

According to Forex Factory:

→ A month ago, GDP was at 0.0% month-on-month;

→ This month, analysts had forecasted growth of 0.2%;

→ Actual growth reached 0.4%.

This news should be welcomed by the Labour Party, which has come into power with ambitious plans for economic development.

On the other hand, how will the Bank of England respond? The GDP growth might provide an argument for maintaining high interest rates for a longer period to ensure that fears of a new inflationary surge do not materialise.

As Bloomberg reports, markets currently assess the likelihood of a rate cut at the next Bank of England meeting on 1 August at just under 50%.

Financial markets reacted with a rise in the sterling's value against other currencies. The GBP/USD rate is at its highest level since early March.
Will the Growth Continue?

The GBP/USD chart shows that the price is in a rally, having risen by 1.7% since the beginning of July.



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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.

PepsiCo Stock Rebounds from Yearly Low Ahead of Earnings Report


The PepsiCo stock chart indicates:

→ Yesterday, the price dropped below $161, setting a new low for 2024.

→ However, by the end of the trading day, the price rose above $163.3, closing near the day's high.

This bullish intraday behaviour might suggest positive sentiment emerging ahead of today's earnings report.

According to Dow Jones Newswires:

→ PepsiCo's management anticipates organic revenue growth of 4% and an 8% increase in earnings per share in 2024.

→ The consensus among analysts tracked by FactSet is a 3% rise in sales and a 7% increase in earnings.

PepsiCo's stock has fallen by 9% over the past two months. Investors are concerned that demand might suffer due to rising prices from inflation and the growing popularity of weight-loss drugs, which could curb people's cravings for snacks and sugary drinks.



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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.

Market Analysis: GBP/USD Eyes 1.3000 While EUR/GBP Struggles


GBP/USD is gaining pace above the 1.2900 resistance. EUR/GBP declined and is now consolidating losses above the 0.8400 region.

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

• The British Pound is attempting a fresh increase above 1.2950.
• There is a key bullish trend line forming with support near 1.2910 on the hourly chart of GBP/USD at FXOpen.
• EUR/GBP is trading in a bearish zone below the 0.8440 pivot level.
• There was a break above a connecting bearish trend line with resistance near 0.8425 on the hourly chart at FXOpen.

GBP/USD Technical Analysis


On the hourly chart of GBP/USD at FXOpen, the pair remained well-bid above the 1.2750 level. The British Pound started a decent increase above the 1.2850 zone against the US Dollar.

The bulls were able to push the pair above the 50-hour simple moving average and 1.2900. The pair even climbed above 1.2925 and traded as high as 1.2949. Recently, there was a minor decline below the 23.6% Fib retracement level of the upward move from the 1.2775 swing low to the 1.2949 high, but the bulls were active above 1.29700.

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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.

The Nasdaq 100 Index Fell Despite Positive Inflation News


Yesterday, Consumer Price Index (CPI) values were published, indicating a slowdown in the rate of inflation in the USA. According to ForexFactory:

→ CPI month-on-month: actual = -0.1%, forecast = 0.1%, previous month = 0.0%;

→ CPI year-on-year: actual = 3.0%, forecast = 3.1%, previous month = 3.3%.

The data confirming the slowdown in inflation raised expectations that the Federal Reserve might lower interest rates as early as September. But why did the Nasdaq 100 (US Tech 100 mini on FXOpen) drop then? Yesterday, the tech stock index fell by over 2.1%, marking its worst day since early May.

The reason lies in rotation. Investors seem to have shifted their focus from the highly inflated tech stocks since the start of 2024 to other sectors. Approximately 400 companies in the S&P 500 index (US SPX 500 mini on FXOpen) showed growth. Meanwhile, the Dow Jones Industrial Average (Wall Street 30 mini on FXOpen) closed in the green yesterday.

Bloomberg reports that Kelly Cox from Ritholtz Wealth Management believes this day could be a turning point for the markets. It also serves as a good reminder of the importance of diversification.

One of the drivers of yesterday's decline was NVDA shares, which fell by more than 5% in a day (we wrote about the bearish behaviour of Nvidia’s price and volumes just the day before).

What’s next?

The equal-weighted version of the S&P 500, where stocks like Nvidia have the same weight as Dollar Tree Inc., rose yesterday. This version of the index is less sensitive to the influence of large tech companies, making a case for the rally expanding to other stocks.



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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.

Analysis of USD/JPY: Was There an Intervention?


Yesterday’s news of slowing inflation in the US sharply weakened the dollar, anticipating the Federal Reserve’s monetary easing. In the first 15 minutes after the data release:

→ EUR/USD rose by approximately 0.45% to the psychological level of 1.09;

→ GBP/USD increased by approximately 0.55%, reaching a 2024 high.

Conversely, USD/JPY fell, with a more aggressive movement. As the chart shows, the dollar weakened against the yen by about 1.8% in the first 15 minutes after the release. This suggests that amidst the US news, the Bank of Japan intervened to support its currency, which hadn’t fallen below 160 yen per USD since June 26.

Reuters reports that Tokyo’s chief currency diplomat, Masato Kanda, stated on Friday that authorities would take necessary measures in the currency market but declined to comment on whether they had intervened.



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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.