Daily Market Analysis By FXOpen

EUR/GBP Exchange Rate Hits 29-Month Low



According to today’s daily chart of EUR/GBP:
→ The rate is around £0.832 per euro – the lowest since April 2022.
→ The RSI indicator has dropped into oversold territory.
Yesterday, the EUR/GBP rate fell by 0.71%, driven by bearish sentiment following the release of PMI indices, which indicated a slowdown in the Eurozone economy.

According to Forex Factory:
French Flash Manufacturing PMI: actual = 44.0, expected = 44.3, previous = 43.9;
French Flash Services PMI: actual = 48.3, expected = 53.0, previous = 55.0;
German Flash Manufacturing PMI: actual = 40.3, expected = 42.4, previous = 42.4;
German Flash Services PMI: actual = 50.6, expected = 51.1, previous = 51.2.
Meanwhile, PMI indices for the UK remain above 50, signalling economic growth.
Flash Manufacturing PMI: actual = 51.5, expected = 52.3, previous = 52.5;
Flash Services PMI: actual = 52.8, expected = 53.5, previous = 53.7.



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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 Price of Gold Continues to Hit Record Highs



As shown by today's XAU/USD chart, the price of an ounce of gold is around $2,628, marking a new all-time high for three consecutive trading days: 20th, 23rd, and 24th September.
The bullish sentiment in the gold market is driven by:
→ the reaction to Wednesday’s decision by the Federal Reserve to cut interest rates by 50 basis points;
→ another surge in tensions in the Middle East.



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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.

How Does a Carry Trade Work?



A carry trade is a popular forex trading strategy that takes advantage of interest rate differentials between two currencies, aiming to earn returns from the interest gap. This article explores what a carry trade is, its formula, and how the strategy works, helping traders understand its potential advantages and risks.

Carry Trade: Definition
A carry trade is a popular forex strategy where traders take advantage of the difference in interest rates between two currencies. It involves borrowing money in a currency with a low borrowing cost—this is known as the "funding currency"—and then converting that borrowed amount into another offering higher interest, called the "investment currency." This is done to earn the interest rate differential between the two.

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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.

RISK WARNING: Trading on the Forex market involves substantial risks, including complete possible loss of funds and other losses and is not suitable for all members. Clients should make an independent judgement as to whether trading is appropriate for them in the light of their financial condition, investment experience, risk tolerance and other factors.

The Dollar Continues to Decline Ahead of US GDP Data



The Fed's rate cut and a series of weak macroeconomic data from the US have contributed to the resumption of the downward trend for the USD in major currency pairs. For instance, EUR/USD buyers are pushing the price towards the key level of 1.1200, GBP/USD has consolidated above 1.3400, and USD/CAD has hit new year-to-date lows at 1.3440. However, in the upcoming trading sessions, important macroeconomic data are expected, which could either strengthen the current trend or lead to a corrective reversal.

USD/CAD



Weak consumer confidence data from the US for September, along with the economic stimulus measures announced by China's central bank, have boosted demand for commodity currencies. Both the Canadian and Australian dollars have strengthened to strategic levels, the breach of which could shift medium-term trends.
Technical analysis of the USD/CAD pair suggests the potential for further declines towards the 1.3360-1.3300 range, as several reversal patterns signalling selling pressure have formed on higher timeframes. The bearish scenario could be invalidated if the price confidently consolidates above 1.3500-1.3480.

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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: Exchange Rate Hits Yearly High Today



According to the NZD/USD chart, the exchange rate has reached 0.635 New Zealand dollars per US dollar today, its highest level since December 2023.
As reported by Trading Economics:
→ On one hand, the "kiwi" strengthened due to China's announcement of an economic stimulus package, as China is New Zealand's largest trading partner.
→ On the other hand, weaker-than-expected US consumer confidence data (CB Consumer Confidence) released yesterday also supported the pair: actual = 98.7, forecast = 103.9, previous = 105.6.



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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.

Meta Platforms (META) Stock Price Holds Near All-Time High



As shown on the Meta Platforms (META) stock chart, the price remains around the $560 level, less than 2% away from the all-time high of over $570, reached on 23 September.
A significant gain of approximately 3.80% in one day was achieved on 19 September, driven by increased demand for shares following the Federal Reserve’s decision to ease monetary policy.
Technical analysis of the META stock chart indicates that:
→ The price is forming an upward channel (constructed using the linear regression method, marked in blue), currently sitting in the upper half of this channel.
→ Prior to breaking through key resistance at $540, the price trajectory formed a bullish "inverse cup with handle" pattern, which aligns with another bullish pattern – an "inverse head and shoulders."
→ The bullish gap that appeared on 19 September could act as a key support zone, helping the price stay above the former resistance at $540.



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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.

Why Would Countries Devalue Their Currency?



Currency devaluation is a nuanced aspect of fiscal policy with profound implications globally. This article demystifies the strategic reasons and consequential effects when nations choose to devalue their currency. From influencing trade balances to adjusting economic strategies, understanding these dynamics is crucial for traders and investors alike. Dive into the complex world of currency devaluation and its far-reaching impact on global economics.

Devalued Currency Definition
So, what is currency devaluation, and how does a country devalue its currency? Currency devaluation is a deliberate downward adjustment of a country's currency value relative to another currency, group of currencies, or standard. This monetary policy decision is typically made by a national government or its central bank. Devaluation is distinct from depreciation, which is a market-driven decrease in currency value.
In a practical sense, devaluation reduces the cost of a country's exports and increases the cost of imports. For countries with fixed or semi-fixed exchange rates, this involves officially lowering the exchange rate by the revaluation of the peg or a change in the pegged currency.

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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.

RISK WARNING: Trading on the Forex market involves substantial risks, including complete possible loss of funds and other losses and is not suitable for all members. Clients should make an independent judgement as to whether trading is appropriate for them in the light of their financial condition, investment experience, risk tolerance and other factors.

Franc and Euro Adjust in Anticipation of Key Events



The end of the current trading week could bring quite a few surprises for market participants. Many important fundamental events are scheduled for the upcoming trading sessions:

1. Today at 11:00 (GMT +3:00) the press conference of the Swiss National Bank
2. Today at 12:15 (GMT +3:00) a speech by Elizabeth McCaul, a member of the Supervisory Board (ECB representative)
3. Today at 15:30 (GMT +3:00) the publication of US GDP
4. Today at 16:20 (GMT +3:00) a speech by US Federal Reserve Chairman Jerome Powell

Depending on the incoming data and comments from officials, the main currency pairs could either continue their current trends or correct towards recent impulses.

USD/CHF
According to the technical analysis of the USD/CHF pair, the price is in a sideways movement in the range of 0.8540–0.8400. The pair has been trading within this channel for about four weeks, and a breakout above the upper boundary of this range could lead to a renewed rise towards 0.8760–0.8640. Should the price decline, last year’s lows around 0.8360 could be revisited.

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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.

Shares of Chinese Companies Surge



As evidenced by today’s Hang Seng chart (Hong Kong 50 on FXOpen), this stock index has risen to a yearly high.
Bullish sentiment in the market is bolstered by promises from China's top leadership, including President Xi Jinping, to achieve the growth target for 2024 and to halt the decline in the real estate market.
Bloomberg News reported that China is considering injecting up to 1 trillion yuan of capital into its largest state lenders to enhance their capacity to support the recovery of the Chinese economy. This proposal is part of broader stimulus measures launched by the People’s Bank of China earlier this week.




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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.

Natural Gas Price Hits 3-Month High



According to today's XNG/USD chart, the price of natural gas:
→ has risen by approximately 30% since the beginning of September;
→ is currently around the 2.95 level – the last time the price was at this level was at the end of June this year.
Bullish sentiment is supported by:
→ forecasts of a warmer autumn, which is increasing demand for natural gas to power air conditioning systems;
→ concerns related to Hurricane Helen in the US Gulf of Mexico. According to the EIA, 5% of total US dry natural gas production comes from the Gulf of Mexico, and 51% of the total capacity of US natural gas processing plants is located along the US Gulf Coast.



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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.

What is a Divergence in Trading? 3 Trading Strategies Explained


Divergence trading is a cornerstone concept in the realm of technical analysis. By comparing the direction of asset prices with the direction of momentum indicators, traders can notice subtle changes in market dynamics.

In this video, we'll dive into the concept of divergence in trading, explaining how it can help identify potential trend reversals or continuations. We'll cover the most popular indicators that form divergences with the price, offering a detailed breakdown of each type.

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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.

RISK WARNING: Trading on the Forex market involves substantial risks, including complete possible loss of funds and other losses and is not suitable for all members. Clients should make an independent judgement as to whether trading is appropriate for them in the light of their financial condition, investment experience, risk tolerance and other factors.

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Best Parabolic SAR Indicator Settings



Parabolic SAR is a key component of technical trading, or technical analysis, which involves assessing financial markets and guiding trading decisions through analysing historical price and volume data, along with utilising diverse technical indicators and chart patterns. This article aims to explore the significance of the Parabolic SAR indicator, finding out which settings make it an effective tool for market analysis.

What Is the Parabolic SAR Indicator?
The Parabolic SAR (Stop and Reverse), or simply PSAR, is a technical analysis indicator designed by J. Welles Wilder to assist traders in identifying potential trend reversals in financial markets. Calculated based on an acceleration factor and an initial SAR value, the indicator trails the price movement, moving towards the trend.

When the Parabolic SAR crosses the price, it signifies a potential trend reversal, serving as a signal for traders to buy or sell depending on the crossover direction. Widely used to identify trend direction and adjust to market volatility, it is often employed in conjunction with other technical tools to make more informed trading decisions, although traders should be cautious and consider risk management strategies. Also, traders widely use the indicator as a trailing stop mechanism.

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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.

RISK WARNING: Trading on the Forex market involves substantial risks, including complete possible loss of funds and other losses and is not suitable for all members. Clients should make an independent judgement as to whether trading is appropriate for them in the light of their financial condition, investment experience, risk tolerance and other factors.

Market Analysis: Gold Price Sets New High While Oil Price Dips Further



Gold price rallied further and traded to a new high above $2,680. Crude oil is showing bearish signs and might decline below $66.80.
Important Takeaways for Gold and Oil Prices Analysis Today

 

1. Gold price started a steady increase from the $2,545 zone against the US Dollar.
2. A key bullish trend line is forming with support near $2,665 on the hourly chart of gold at FXOpen.
3. Crude oil prices failed to clear the $72.20 region and started a fresh decline.
4. There is a connecting bearish trend line forming with resistance at $68.10 on the hourly chart of XTI/USD at FXOpen.

Gold Price Technical Analysis

On the hourly chart of Gold at FXOpen, the price found support near the $2,545 zone. The price remained in a bullish zone and started a strong increase above $2,600.
There was a decent move above the 50-hour simple moving average and $2,620. The bulls pushed the price above the $2,635 and $2,650 resistance levels. Finally, the price climbed to a new all-time high near the $2,685 level.

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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.

Micron Technology (MU) Shares Surge by Approximately 15%



The US stock market is experiencing positive momentum following the much-anticipated decision by the Federal Reserve to cut interest rates this month. The S&P 500 (US SPX 500 mini on FXOpen) closed at a new all-time high, driven by yesterday's news of:
→ Steady US GDP growth at 3% annually
→ Low unemployment, with 218K jobless claims filed last week (forecast = 224K, previous = 222K).

One of the top performers on the stock market yesterday was memory chip maker Micron Technology (MU). As seen on the MU stock chart, yesterday's candle closed around the $110 level, up from below $95 at the start of the week.
The strong bullish momentum was driven by Micron Technology's quarterly earnings report. According to Barron’s:
→ Earnings per share reached $1.18 for the fourth fiscal quarter, beating analysts’ forecasts of $1.11;
→ Revenue grew by 93% year-on-year to $7.75 billion;
→ Micron Technologies expects revenue next quarter to be $8.7 billion, surpassing forecasts of $8.3 billion and significantly more than $4.73 billion for the same period last year;
→ Micron Technologies' CEO Sanjay Mehrotra stated that demand for AI "drove a strong ramp of our data-center DRAM products and our industry-leading high-bandwidth memory."




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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.

Brent Crude Oil Price Drops to Yearly Low



When analysing the oil market on the XBR/USD chart on 4th September, with Brent crude trading near its yearly low, we:
→ noted the formation of a descending channel (marked in red);
→ highlighted key support (marked in yellow), which has now been broken;
→ suggested the likelihood of an interim upward correction, potentially rising to $74.50.
Since then, Brent crude oil:
→ climbed to $75;
→ tested the yellow line from below;
→ then reversed downwards, reaffirming the relevance of the red descending channel (as the bullish breakout attempt failed).
Bearish sentiment was fuelled by reports of a potential increase in global oil supply, particularly due to higher production in Libya and Saudi Arabia.
Could Brent crude prices continue to fall?




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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.

Understanding the Volume-Weighted Average Price (VWAP) Indicator in Trading



Known for its use by both institutional and retail traders, the Volume-Weighted Average Price (VWAP) indicator is one of the most well-respected trading tools. But how does it work, and what does it tell us? Join us in this article as we dive into the world of VWAP trading, exploring its applications, advantages, and limitations.

The VWAP Indicator Explained
What does VWAP stand for? VWAP is an acronym for the Volume-Weighted Average Price indicator. There are two key terms here:
- Volume-Weighted: The calculation considers the amount of volume traded during each time period.
- Average Price: The mean price of an asset over a specified timeframe.

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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.

RISK WARNING: Trading on the Forex market involves substantial risks, including complete possible loss of funds and other losses and is not suitable for all members. Clients should make an independent judgement as to whether trading is appropriate for them in the light of their financial condition, investment experience, risk tolerance and other factors.

Alibaba Group (BABA) Share Price Rises Over 30% Since Early September



As shown on the Alibaba Group (BABA) stock chart, the price surpassed $107 on the NYSE on Friday, after trading below $85 at the start of the month.
Bullish sentiment surrounding Chinese stocks is driven by the authorities' plans to stimulate the country's economy:
→ According to Benzinga, China’s Central Bank shared plans last week to lower the banks’ required reserve ratio (RRR);
→ The Central Bank also outlined further support measures for the struggling real estate market.
It appears that market participants expect these economic stimulus measures to benefit Alibaba Group (BABA).



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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.

USD/JPY Analysis: The Yen Strengthens by Over 2.8% in One Day



According to Reuters, it was announced on Friday that Shigeru Ishiba, known for his tough stance on interest rates, will become Japan's next Prime Minister.
This news caused a sharp intraday reversal in the USD/JPY exchange rate on Friday: while the price initially rose in the morning (as shown by the arrow), it was followed by a sharp downward impulse later in the day.
Technical analysis of the USD/JPY chart shows:
→ The price made a false bullish breakout of the upper boundary of the descending channel before retreating back inside it;
→ The price broke the upward trend (marked by blue lines);



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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.

What Is a Diamond Chart Pattern, and How Can You Trade It?


The diamond chart pattern is a technical analysis tool used by traders in different financial markets for breakout trading. It can provide valuable insights into potential price movements and trend reversals. However, it can be challenging to find it in a price chart. In this FXOpen article, we will tell you how to spot the diamond formation and build your own trading strategy.

Overview of the Diamond Pattern
The diamond is a reversal pattern, meaning it can signal a potential trend change in the market. It typically occurs after an extended trend and indicates a period of consolidation before a potential breakout in the opposite direction.
The diamond can be bearish and bullish; therefore, it is also known as the diamond top pattern and diamond bottom pattern for trading. A bearish formation typically occurs during an uptrend and signals a potential reversal to the downside, while a bullish diamond pattern in trading forms during a downtrend and signals a potential reversal to the upside.

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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.

RISK WARNING: Trading on the Forex market involves substantial risks, including complete possible loss of funds and other losses and is not suitable for all members. Clients should make an independent judgement as to whether trading is appropriate for them in the light of their financial condition, investment experience, risk tolerance and other factors.

XAG/USD Analysis: Silver Price Fails to Hold at 11-Year High



As shown on the XAG/USD chart, during the trading session on 26th September, the price of silver surpassed the previous 2024 high (set in July), reaching levels last seen in December 2012.
Key drivers of silver’s price include news related to the Federal Reserve’s policy:
→ Last month, when the Federal Reserve cut interest rates, it led to a rise in both gold and silver prices.
→ However, precious metal prices dipped slightly yesterday after Fed Chair Jerome Powell adjusted expectations regarding further rate cuts this year, stating that the Fed would not rush into making more reductions.




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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.