Daily Market Analysis By FXOpen

[FXOpen Trader]

US Currency Continues to Grow Ahead of GDP Data Release


Good data on core durable goods orders in the US for August and a general decrease in risk appetite in the market are helping to strengthen the US dollar. The American currency set new highs in such pairs as EUR/USD, GBP/USD, and USD/CHF. Commodity currencies, along with precious metals, continue to decline.

USD/CHF

The latest meeting of the Swiss National Bank (SNB) disappointed buyers of the Swiss franc. Contrary to analysts' forecasts, officials refused to raise the rate by 0.25%. The change in the vector of the SNB monetary policy contributed to a sharp strengthening of USD/CHF. In just a few days, the price rose by 300 points and strengthened above the alligator lines on the weekly timeframe. If the current situation does not change and the US dollar continues to strengthen, the pair may continue to rise towards the nearest important resistance range of 0.9400-0.9450. We can consider a cancellation of the upward scenario only after the pair moves below the psychological level of 0.9000.

Today's news on US GDP for the Q2 will be important for the pair's pricing. The publication of the indicator is scheduled for 15:30 GMT+3. Also, at the same time, weekly data on the number of applications for unemployment benefits in the United States will be released.



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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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US Government Shutdown: Assessing Economic Impact and Recession Risks


The recurring spectre of a government shutdown has once again loomed over the United States, prompting concerns about its potential economic consequences. The shutdown may occur this weekend unless lawmakers agree on spending levels and whether to give more aid to Ukraine. Economists and analysts are closely examining the situation, weighing the likelihood of a recession, and evaluating the resilience of the American economy in the face of this uncertainty.

The Longer the Shutdown, the Greater the Damage

A recurring theme has emerged from past government shutdowns: their duration directly correlates with the extent of economic damage.

A brief shutdown is unlikely to significantly impede economic growth or push the nation into a recession, as both Wall Street and the Biden administration economists contend. Historical evidence from previous government funding stoppages supports this assertion, revealing limited economic disruption during short-lived closures.

However, the narrative shifts when contemplating a protracted shutdown scenario. A sustained government shutdown has the potential to erode economic growth, potentially impacting President Biden's re-election prospects. This challenge would compound other economic headwinds anticipated in the final months of the year, including elevated interest rates, the resumption of federal student loan payments, and a possible extended United Automobile Workers strike.

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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.

[FXOpen Trader]

Gold Price Accelerates Lower, Crude Oil Price Dips


Gold price is moving lower below the $1,885 support. Crude oil price is now correcting gains and trading below the $92.00 support.

Important Takeaways for Gold and Oil Prices Analysis Today

• Gold price failed to clear the 1,915 resistance and moved lower against the US Dollar.
• A major bearish trend line is forming with resistance near $1,865 on the hourly chart of gold at FXOpen.
• Crude oil prices are now correcting lower below the $92.00 zone.
• There was a break below a key bullish trend line with support near $92.50 on the hourly chart of XTI/USD at FXOpen.

Gold Price Technical Analysis


On the hourly chart of Gold at FXOpen, the price struggled to settle above the $1,915 resistance. The price started a fresh decline below the $1,900 pivot level.

The price traded below the $1,885 support and the 50-hour simple moving average. It tested the $1,858 zone. A low is formed near $1,857.71 and the price is now consolidating losses. It is now struggling below the 23.6% Fib retracement level of the downward move from the $1,915 swing high to the $1,857 low.

There is also a major bearish trend line forming with resistance near $1,865. The next major resistance is near $1,870, above which the price could test the 50-hour simple moving average at $1,880.

The next major resistance is near the 61.8% Fib retracement level of the downward move from the $1,915 swing high to the $1,857 low at $1,892. An upside break above the $1,892 resistance could send Gold price toward $1,915. Any more gains may perhaps set the pace for an increase toward the $1,930 level.

Initial support on the downside is near the $1,858 level. The first major support is near the $1,850 level. If there is a downside break below the $1,850 support, the price might decline further. In the stated case, the price might drop toward the $1,832 support.

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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.

[FXOpen Trader]

US 30 Analysis: Dow Jones Finds Support


September is likely to be the second month in a row that the Dow Jones (US 30) stock market index declined. The last time this happened was... also in September, a year ago.

Important economic data was published yesterday:
→ According to a revised report released by the Bureau of Economic Analysis, US real GDP increased 2.1% year over year in the second quarter. This reduces the risk of recession.
→ The number of applications for unemployment benefits amounted to 204k for a week, which continues the downward trend that has emerged since June of this year.

Today, fresh data on the PCE inflation index will be published, it can provide evidence that inflation is slowly subsiding as long as the economy remains resilient.

More bullish arguments for displaying cautious optimism are provided by the Dow Jones index chart:

→ the price of US 30 has formed an inverted head-and-shoulders pattern (SHS);
→ this bullish pattern formed near the lower border of the descending channel — which indicates support from this line;
→ after Wednesday, when the bearish acceleration was noticeable, the price recovered — this is a sign that if there were panic sentiments, they have exhausted themselves.
→ On Thursday, the bears’ attempts to resume the decline failed, and Friday morning looks optimistic – during the Asian session the price exceeded Thursday’s high.



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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.

[FXOpen Trader]

The Price of Gold Drops Below $1,900


The decline in the price of the asset considered a safe haven was facilitated by rising bond yields, which are becoming more attractive for investment in a high-interest environment. According to top Federal Reserve officials, new increases are possible to achieve inflation targets.

At yesterday's low, the price fell below 1,860 per ounce for the first time since March 2023. Will the fall continue? The XAU/USD chart on the 4-hour time frame provides valuable information for thought.



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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.

[FXOpen Trader]

Watch FXOpen's 25 - 29 September Weekly Market Wrap Video

Weekly Market Wrap With Gary Thomson: Inflation, EUR/USD, S&P 500, 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 Still Dogs the Economy: What Are the Central Banks Doing About It?
• Market Analysis: EUR/USD Takes Hit While USD/CHF Surges
• S&P 500 Analysis: Price Reaches The Edge of Abyss
• Market Analysis: Oil Surges to a New High of the Year

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.





FXOpen YouTube


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.

#fxopen #fxopenyoutube #fxopenuk #fxopenint #weeklyvideo

[FXOpen Trader]

GBP/USD Struggles While EUR/GBP Eyes Increase


GBP/USD is struggling below the 1.2235 resistance zone. EUR/GBP is rising and might climb above the 0.8675 resistance.

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

• The British Pound is showing bearish signs below 1.2235 and 1.2270.
• There is a key bullish trend line forming with support near 1.2160 on the hourly chart of GBP/USD at FXOpen.
• EUR/GBP is rising and trading above the 0.8660 zone.
• There is a major bearish trend line forming with resistance near 0.8675 on the hourly chart at FXOpen.

GBP/USD Technical Analysis


On the hourly chart of GBP/USD at FXOpen, the pair attempted a fresh increase above 1.2235. However, the British Pound failed above 1.2270 and started a fresh decline against the US Dollar.

There was a clear move below the 1.2235 support and the 50-hour simple moving average. The pair even traded below the 50% Fib retracement level of the upward move from the 1.2110 swing low to the 1.2271 high.

The pair is now showing bearish signs below 1.2200. On the downside, there is a key support forming near 1.2160 or the 76.4% Fib retracement level of the upward move from the 1.2110 swing low to the 1.2271 high.

There is also a key bullish trend line forming with support near 1.2160. If there is a downside break below the 1.2160 support, the pair could accelerate lower.

The next major support is near the 1.2110 zone, below which the pair could test 1.2050. Any more losses could lead the pair toward the 1.2000 support. On the upside, the GBP/USD chart indicates that the pair is facing resistance near the 50-hour simple moving average at 1.2200.

The next major resistance is near 1.2235. A close above the 1.2235 resistance zone could open the doors for a move toward 1.2270. Any more gains might send GBP/USD toward 1.2350.

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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.

[FXOpen Trader]

XAG/USD Analysis: Silver Price Quickly Drops by Approximately 7.5%


On Friday, silver was trading at USD 23.5 per ounce, but on Monday morning it dropped below USD 21.7 – a difference of 7.5%.

Fundamental influencing factors are not clearly identified, but it can be assumed that the sharp drop was facilitated by:
→ the fact that a shutdown of US government agencies was avoided, since the authorities reached a budget agreement – albeit a temporary one;
→ high yield on bonds;
→ at the end of the Q3, the long-term portfolios of large market participants were rebalanced.

Factors could put pressure on gold (it also shows a negative trend, falling below USD 1,850 per ounce for the first time since March of this year), and more volatile silver rushed after gold.

Technical analysis adds more information about the nature of the fall. In mid-July, we wrote that the price of gold had approached the upper limit of the long-term downward channel (shown in yellow), from which resistance could be expected.

However, the strength of demand was exhausted earlier, around the level of USD 25 per ounce, it turned out to be an unbearable barrier for the bulls, which is noticeable in the price action in July and August.



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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.

[FXOpen Trader]

Euro Analysis: ECB Cautions Against Rate Cuts Amid Inflation Battle


Luis de Guindos, the Vice-President of the European Central Bank (ECB), has firmly dismissed the notion of rate cuts as "premature" amidst the ongoing struggle to combat surging inflation. Speaking to the Financial Times, he cautioned that overcoming the final hurdles to return inflation to the target rate of 2 percent will be a formidable task.

The ECB's governing council has been grappling with the sharpest inflation increase in a generation. To address this, the bank has undertaken a record 10 consecutive deposit rate hikes, bringing it to an all-time high of 4 percent. Despite recent inflation cooling off to a two-year low, the ECB emphasised that the recent spike in oil prices to a 10-month high presents new challenges.

In a statement to the press yesterday, Luis de Guindos said, "We are on our way towards 2 percent, but we must monitor that very closely, as the last mile will not be easy. The elements that might torpedo the disinflation process are powerful."

In addition to oil, other factors such as rapid wage growth, a weakened euro, and continued strong demand for services could sustain high inflation rates. Eurozone inflation data released on Friday revealed a drop to 4.3 percent in the year to September, surpassing economists' expectations.

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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.

[FXOpen Trader]

Dollar Falls After Inflation Data Release


EUR/USD

The euro rose on Friday following the release of softer-than-expected US inflation data. The data showed that the price index for personal consumption expenditures (PCE), excluding volatile components of food and energy, increased 3.9% year-on-year in August, the first time it fell below 4% in more than two years. The Fed tracks PCE price indexes to achieve its 2% inflation target. The euro was up 0.10% on the day at USD 1.0578, but it was its worst quarter against the dollar in a year, down 3.08%. The immediate resistance can be seen at 1.0582, and a breakout to the upside could trigger a rise towards 1.0619. On the downside, immediate support is seen at 1.0491, a break below could take the pair towards 1.0441.

The price has broken through the upper boundary of the downward 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.