Daily Market Analysis By FXOpen

Watch FXOpen's 8 - 12 July Weekly Market Wrap Video

Weekly Market Wrap With Gary Thomson: GBP/USD, EUR/USD, USD/JPY, XAU/USD, NVDA Stock

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.

• GBP/USD Hits Four-Month High Following GDP Growth News
• Market Analysis: EUR/USD Jumps, USD/JPY Bulls Seem Unstoppable
• XAU/USD Analysis: Gold Price Falls from Six-Week High
• Analysts Raise NVDA Forecasts, Stock Price Rises

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The Nikkei Index Has Risen To a Two-Month High


As we reported on 26th June, analysing the Nikkei 225 chart (Japan 225 on FXOpen):

→ The price is in a significant upward trend (shown by the blue channel);

→ The price may continue to rise along the median line.

Since then, the Nikkei 225 index (Japan 225 on FXOpen) has increased by more than 6%, reaching a yearly high on 10th July above 42,500 points. The price particularly surged on 9-10 July, breaking resistance at 41,160 (formed from the previous peak at the end of March).

However, the bears made a strong comeback afterwards, pushing the price back to the 41,160 level. Thus:

→ Completely offsetting the gains from 9-10 July;

→ Forming a bearish engulfing pattern spanning 4 candles;

→ Prompting consideration that the breakout above 41,160 was false (a trap for bulls).

According to Reuters, bearish drivers included technology stocks such as Tokyo Electron, which saw a more than 6% decline in one day, following sell-offs in US technology stocks (as reported on 12th July).

Sentiment in the Japanese stock market is also influenced by risks of interventions by the Bank of Japan to support the yen.



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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.

Insiders Are Selling Shares of Large Companies


Yesterday, the S&P 500 stock index (US SPX 500 mini on FXOpen) set another historical high, closing near the 5650 level.

However, similar records are not observed on the charts of rally leaders from the first half of 2024 – NVDA's price is 8.6% below its historical high, MSFT is 3.1% lower, and GOOGL is 2.6% below its record.

And this isn't the only cause for concern. Insider sales, as indicated by reports to the SEC, could add to anxieties. For instance:

→ Bezos sold over $900 million worth of AMZN shares;

→ Nvidia board member Mark Stevens continues to sell NVDA shares, as does company CEO Jensen Huang.

According to Goldman Sachs, fund managers have increased their long positions in US stock index futures to record levels.

And according to a July survey of fund managers conducted by Bank Of America:

→ Market sentiment remains bullish amid expectations of a Fed rate cut and a soft landing for the economy;

→ Geopolitics now pose the biggest risk to markets, followed by inflation.

If professional market participants foresee further growth in the stock index, it might not be driven by shares of large companies.

On June 27, we discussed the bullish "cup and handle" pattern near the $190 level on the AMZN price chart. Since then, bulls have shown the ability to push the price towards the psychological level of $200, but they have not managed to sustain this success.



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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 EUR/USD Rate Set a 16-Week High


According to the EUR/USD chart, the euro to dollar exchange rate yesterday surpassed the peak from early June, rising above 1.092 – the last time the price was at this level was on March 21.

Bullish sentiments in the market were supported by:

→ Approaching Thursday's meeting of the European Central Bank – it is expected that interest rates will remain unchanged. However, attention will be focused on comments from its president Christine Lagarde regarding the timing of the next interest rate cut.

→ Expectations of rate cuts by the Federal Reserve in September. As Reuters reports, Powell stated yesterday that economic indicators in the US for the second quarter "to some extent bolster the confidence" that inflation is returning to the target level in a sustainable manner.

As we mentioned in our analytical review of the EUR/USD chart on July 1:



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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: AUD/USD and NZD/USD Poised For Fresh Gains


AUD/USD is attempting a fresh increase from the 0.6715 support. NZD/USD is also rising and could target the 0.6090 resistance.

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

• The Aussie Dollar found support at 0.6715 and recovered higher against the US Dollar.
• There is a major bearish trend line forming with resistance at 0.6740 on the hourly chart of AUD/USD at FXOpen.
• NZD/USD is consolidating above the 0.6050 support.
• There was a break above a key bearish trend line with resistance at 0.6060 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 0.6715. The Aussie Dollar started a decent recovery wave above the 0.6725 resistance against the US Dollar, as mentioned in the previous analysis.

The bulls pushed the pair above the 23.6% Fib retracement level of the downward move from the 0.6793 swing high to the 0.6714 low. However, the pair is still below the 50-hour simple moving average.

On the upside, the AUD/USD chart indicates that the pair is now facing resistance near the 0.6740 zone. There is also a major bearish trend line forming with resistance at 0.6740.

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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 Dollar Corrected After a Sharp Decline. Will the Uptrend Resume?


A sustained decline in the core consumer price index in the US contributed to a sharp pullback in the American currency. The GBP/USD currency pair is trading near the psychological level of 1.3000, EUR/USD buyers are attempting to hold above 1.0900, and USD/JPY has lost over 300 pips in just two days. However, after the release of positive retail sales data yesterday, the dollar managed to recover some of its losses. Let's consider whether it is possible for the USD to resume its upward trend and what factors might influence this.

GBP/USD


The British currency strengthened sharply after the Labour Party's victory in the recent parliamentary elections. The slow but steady economic growth and reduction in political uncertainty are playing into the hands of the British currency: the GBP/USD pair is preparing to test the year's highs at 1.3140-1.3100.

Technical analysis of GBP/USD indicates the possibility of continued growth, as a “bullish engulfing” pattern was formed on the weekly timeframe after breaking through the resistance at 1.2850. The primary target for the upward movement is the range of 1.3140-1.3100. If pound buyers manage to hold above these levels, a rise to the strategic levels of 1.3600-1.3500 is possible. In the case of a drop below 1.2900, a downward correction towards 1.2870-1.2850 is likely.

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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.

US Banks Set a Bullish Tone at the Start of Earnings Season


Company earnings reports for the second quarter will be a crucial driver of stock market movements in the coming weeks. Traditionally, the largest banks kick off the earnings season, and their performance indicators today are setting a bullish tone.

For example:

Bank of America (BAC), report published on 16th July:

→ Earnings per share: actual = $0.83, expected = $0.797;

→ Gross income: actual = $25.37 billion, expected = $25.22 billion;

Goldman Sachs (GS), report published on 15th July:

→ Earnings per share: actual = $8.62, expected = $8.35;

→ Gross income: actual = $12.73 billion, expected = $12.35 billion.

Other major banks, including JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC), have also surpassed analysts' expectations. Although following different trajectories, the stock prices of all the listed banks have generally been rising after the publication of their earnings reports.

Notably, the formation on the XLF chart is interesting – this is the Financial Select Sector SPDR Fund ETF, which is focused on the financial sector and includes the shares of the largest US banks. You can trade this ETF with FXOpen, taking advantage of CFD instruments.



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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 XAU/USD: Gold Price Sets Historical Record


As the XAU/USD chart shows, on 16th July, the gold price rose above $2460 for the first time in history. The bullish sentiment is driven by:

→ Anticipation of Fed rate cuts, as the appeal of non-yielding bullion generally increases in low-interest-rate environments.

→ Geopolitical tensions, with an attempt on Trump's life possibly boosting demand for the "safe-haven asset."

→ Demand from central banks.

Reuters reports that analysts at Commonwealth Bank of Australia believe the gold price could exceed their forecast of $2500 per ounce by the end of 2024. "It is worth highlighting gold's ability to find support under any conditions this year," they say.

Can the gold price rise further?



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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.

Analytical ECB Rate Predictions for 2024, 2025 and Beyond


With the European Central Bank recently cutting interest rates for the first time since its hiking cycle began in 2022, many are wondering where the ECB’s policy rate may be headed next. This article provides an analysis of the projected ECB interest rates for 2024, 2025, and beyond, exploring the factors influencing these rates and offering insights into future economic conditions.

Current Eurozone Interest Rate Environment

As of June 2024, the European Central Bank (ECB) has recently cut its interest rates for the first time since 2016, lowering the deposit rate by 25 basis points to 3.75%​​. The ECB’s current interest rate on the main refinancing operations is 4.25%. This decision comes after a series of substantial rate hikes implemented between mid-2022 and September 2023, which were necessary to combat the peak inflation observed during that period.

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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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Commodity Currencies in Stable Ranges: Should We Expect a Breakout?


The currency pairs AUD/USD and USD/CAD, unlike the pairs with the Euro, Yen, and Sterling, continue to demonstrate long-term stability. These pairs have been trading in narrow price corridors for several months. Given the weakening of the dollar in many directions, there is a high likelihood of increased volatility and a breakout from the flat channels in commodity currencies.

USD/CAD


Last week, the USD/CAD pair sharply rebounded from the significant support at 1.3600, forming a bullish "hammer" pattern. Technical analysis of the pair suggests a potential resumption of the upward movement if the buyers manage to consolidate above 1.3700. It is worth noting that the price is testing this level for the second time this week. The inability of dollar bulls to overcome this resistance could push the price back to 1.3600-1.3580.

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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.