Edu Daily Market Analysis By FXOpen

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Watch FXOpen's 1 - 5 April Weekly Market Wrap Video

Weekly Market Wrap With Gary Thomson: US stock market, EUR/USD, Oil, Gold

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.

• The US Stock Market Awaits the Publication of NFP and Unemployment Data
• Market Analysis: EUR/USD Starts Recovery, USD/CHF Could Extend Gains
• Brent Oil Price Reaches Its Highest Since October 2023
• Gold Price XAU/USD Sets Another All-time 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.

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[FXOpen Trade]

FTSE 100's Holy Grail of 8,000 Continues to Be a Pipe Dream

The British economy has been somewhat of an anomaly over the past few years. In no way did the British authorities limit the liberties and livelihoods of the population to the extent that the North American authorities did during 2020 and 2021, and the nation has far less national debt.

Britain's banking industry is also less notorious for high profile, large scale collapses of long established institutions, and its overall investing mentality is very conservative compared to the gung-ho nature of the United States capital markets and commercial investing culture.

The differences between some of the largest stock markets in the world are also indicators of this differential. The technology-focused NASDAQ exchange in New York is a bastion of volatility and comprises the 'Magnificent 7' Silicon Valley internet companies as well as a raft of startups which suddenly gained multi-billion dollar valuations and entered the public listing arena via SPAC blank cheque companies.

By contrast, Britain's FTSE 100 index, which represents the 100 most highly capitalised companies whose stock is listed on the London Stock Exchange, represents more traditional, bricks and mortar businesses in more 'grey suit' sectors such as transport, construction, energy giants, retail chains and pharmaceuticals.

The FTSE 100 has been very buoyant recently however over the past few weeks, the index stopped short of the much anticipated 8,000 mark, and its performance has been slowly tailing off.

On March 1, the FTSE 100 reached 7,978 points after a month-long rally, which made it look as if 8,000 points was in easy reach, but since the beginning of last month, it has been decreasing in value, today standing at 7,925.4 at 8.30 am as the excitement of the week's trading begins in London.

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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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BTC/USD Analysis: Bitcoin Price Rises Ahead of Halving

The halving (reduction of block mining rewards) is expected to occur on April 19-20.

Theoretically, Bitcoin mining will become less profitable, leading to a reduction in coin supply. Given unchanged demand, this should drive up the BTC/USD price. Ripple CEO Brad Garlinghouse has forecasted that the cryptocurrency market cap will double by the end of 2024, reaching $5 trillion, with Bitcoin's halving contributing to this growth.

In practice, Bitcoin price is influenced by too many factors to conclusively prove the bullish impact of halving. For instance, looking at history, the last halving occurred on May 11, 2020, and the price increased by approximately 12% in the following week. On the other hand, today's Bitcoin price might already reflect the imminent halving.

Nevertheless, the market currently shows predominantly positive sentiment, as over the weekend, BTC/USD price rose by around 2.5%.

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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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The Market Is Waiting for Inflation Values in the US

Tomorrow one of the most significant events of the week will take place, which can greatly affect the sentiment of participants in both the currency and stock markets - at 15:30 GMT+3 inflation data will be published, namely: the values of the CPI (Consumer Price Index) and Core indices CPI.

According to ForexFactory, analysts expect the following values:
→ Core consumer price index, excluding food and energy prices, (Core CPI) in monthly terms: forecast = 0.3%, previous value = 0.4%
→ Consumer Price Index (CPI) in monthly terms – similar: forecast = 0.3%, previous value = 0.4%.
→ CPI in annual terms: forecast = 3.4%, previous value = 3.2%.

The Fed's inflation target is 2%. The values that will be published tomorrow may greatly affect market participants' expectations regarding the Fed's monetary policy.

According to the CME FedWatch tool:
→ traders are confident that the Fed will leave the rate unchanged in May;
→ the probability that the Fed will cut rates in June is just over 50%. But if the CPI indicates that inflation is stable, the likelihood will likely decrease.

Minneapolis Fed President Neel Kashkari said last week that a Fed rate cut was not a possible scenario if inflation continued to move sideways. George Lagarias, chief economist at Mazars, told CNBC, "I wouldn't be surprised if we see smaller rate cuts by the end of the year."

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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.

 

[FXOpen Trade]

Rate Cut Rhetoric Blunts US Stock Market Performance

Analysts' speculation regarding the central bank policy within the United States has been very much based on sentiment over the past few months.

A few months ago, a quick glance at the mainstream financial headlines would have been enough to ensure a clear view that 2024 would be a year of reducing interest rates, and commentators and analysts had even made predictions regarding actual times during the year at which rate cuts would take place.

These predictions were scuppered in February when minutes from the Federal Open Markets Committee (FOMC) meeting at the end of January stated that the Federal Reserve Bank would not be reducing interest rates in the early part of this year and was sticking firmly to its conservative policy of working toward a sustainable 2% inflation rate.

That dialogue has resurfaced this morning, this time as a result of the Federal Reserve having maintained its forecast for lowering interest rates three times this year despite not having done so in the first quarter as was expected by so many pundits, but this time, the talk is more focused on whether these will actually go ahead at all.

In Minneapolis, Minnesota, the state Federal Reserve president Neel Kashari commented that the central bank might look to keep interest rates at their current level for the remainder of the year if inflation progress stalls, an interesting remark at the beginning of earnings season for many large publicly listed North American companies.

Some asset managers have written to their clients and advised that they hold the view that the Federal Reserve will not reduce interest rates this year. What will actually happen is still very much open to speculation until any decision is announced by the central bank.

On this point, stock markets across the United States remained flat as US equities concluded yesterday's New York trading session nearly flat, as investors embarked on a significant week poised to include the latest inflation figures, which could influence expectations for interest rate cuts, and the commencement of the earnings season for the first quarter.

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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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Market Analysis: GBP/USD Recovers While EUR/GBP Dips to Support

GBP/USD is gaining pace above the 1.2660 resistance. EUR/GBP declined steadily below the 0.8572 and 0.8566 support levels.

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

• The British Pound is attempting a fresh increase above 1.2660.
• There is a key bullish trend line forming with support near 1.2670 on the hourly chart of GBP/USD at FXOpen.
• EUR/GBP is trading in a bearish zone below the 0.8572 pivot level.
• There is a connecting bearish trend line forming with resistance near 0.8562 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 1.2575 level. The British Pound started a decent increase above the 1.2605 zone against the US Dollar.

The bulls were able to push the pair above the 50-hour simple moving average and 1.2660. The pair even climbed above 1.2700 and traded as high as 1.2709. It is now correcting gains below the 23.6% Fib retracement level of the upward move from the 1.2574 swing low to the 1.2709 high.

On the upside, the GBP/USD chart indicates that the pair is facing resistance near 1.2675. The next major resistance is near 1.2710.

A close above the 1.2710 resistance zone could open the doors for a move toward 1.2740. Any more gains might send GBP/USD toward 1.2800. On the downside, there is a key support forming near a bullish trend line at 1.2670.

If there is a downside break below 1.2670 and 1.2660, the pair could accelerate lower. The next major support is near the 50% Fib retracement level of the upward move from the 1.2574 swing low to the 1.2709 high at 1.2640.

The next key support is seen near 1.2605, below which the pair could test 1.2575. Any more losses could lead the pair toward the 1.2500 support.

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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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ADA Drops to Last Place in the Top 10 Cryptocurrencies

ADA, the native blockchain token of the Cardano network, has dropped to 10th place among the cryptocurrencies with the largest capitalization. Today, according to CoinMarketCap, the capitalization of Cardano (ADA) is USD 20.7 billion.

On the one hand, this happened due to the success of such competitors as:
→ Dogecoin (DOGE) with a capitalization of USD 27.1 billion, approximately +108% since the beginning of the year;
→ Toncoin (TON) with a capitalization of USD 23.7 billion, approximately +193% since the beginning of the year.

On the other hand, the ADA/USD rate behaves weaker than other cryptocurrencies. Year to date, it has dropped by several percent since January 1, 2024. And this is against the background of a bull market, which should greatly confuse investors.

Will Cardano (ADA) be able to strengthen its position in the top 10 cryptocurrencies?

Bulls' hopes may be tied to the approaching Chang update (expected in the second quarter of 2024), which will implement the concept of a self-governing community on the blockchain by introducing delegate representatives (DReps) and community voting to approve the first draft of the Cardano Constitution.

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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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NZD/USD Rate Increases after the Decision of the Reserve Bank of New Zealand

This morning the Reserve Bank of New Zealand (RBNZ) decided to keep interest rates unchanged at 5.5%:

→ the decision to keep the interest rate at this high level is made for the sixth time in a row;

→ the RBNZ said rates should remain high for some time to ensure inflation is contained;

→ this decision was expected - all 25 economists in the Bloomberg survey predicted it.

However, New Zealand's economy is in recession, with GDP contracting in four of the last five quarters — prompting market participants to speculate that the central bank will begin cutting rates in the second half of this year.

The market reaction was a slight strengthening of the New Zealand dollar. Thus, the NZD/USD rate today rose to its April high.

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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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The US Dollar Rose Sharply after Inflation Data. When Is Correction Possible?

For the second time this year, the US consumer price index turned out to be higher than experts predicted. Thus, in February the figure increased from 3.1% to 3.2%. In March, the consumer price index, exceeding the expectations of economists surveyed by Bloomberg, was at 3.5%. The continued rise in inflation, coupled with a strong labor market, contributed to:

Fed representatives are extremely cautious regarding the future direction of monetary policy;
market participants are lowering expectations of how many quarters of a percent the rate could be cut this year.
As a result of the current situation, European currencies returned to recent lows, and the USD/JPY pair updated its 2022 high.

USD/JPY

US dollar buyers in the USD/JPY pair managed to move above the important support level of 152.00. The price on the USD/JPY chart rose to 153.20, but further pricing of the pair will depend on the actions of the Japanese regulator. Bank of Japan officials have repeatedly stated that near 152.00 they may resort to foreign exchange interventions to support the national currency. With the intervention of the central bank, the pair may correct to the nearest support levels at 152.00-150.00. At the same time, we cannot exclude continued exponential growth in the direction of 155.00-154.00.

Important for USD/JPY pricing will be today's news on the US producer price index for March and weekly data on the number of initial applications for unemployment benefits.

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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.

 

[FXOpen Trade]

Inflation Data Sharply Strengthens the US Dollar

Data on consumer prices and core inflation published yesterday exceeded expectations. According to ForexFactory:

→ Core CPI in monthly terms: actual = 0.4%, expected = 0.3%, a month ago = 0.4%;
→ CPI in annual terms: actual = 3.5%, forecast was = 3.4%, previous value = 3.2% with a target value of 2%.

As a result of the publication of news, market participants' expectations that the Federal Reserve will leave rates unchanged in June have sharply increased. According to the CME FedWatch Tool, before the publication of news about inflation, the probability of this was = 42.6% (that is, the majority believed that there would be a rate cut), then after the publication the probability = 83.0%. This is a dramatic change in sentiment.

Speaking to Bloomberg, former US Treasury Secretary Larry Summers said cutting rates in June would be a dangerous and egregious mistake, adding: "You have to take seriously the possibility that the next rate move will be upwards rather than downward." .

The reaction of financial markets was the strengthening of the US dollar in the context of tight monetary policy, the effect of which will last longer:
→ USD has risen in price in currency pairs — for example, USD/CHF has risen to its maximum in six months;
→ Bitcoin fell in price, but this morning the main cryptocurrency has already recovered from yesterday’s fall;
→ gold tested support at 2,320.

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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.

 

[FXOpen Trade]

USD/JPY Rises to Highest Since 1990

This morning the USD/JPY rate is around 153.20 yen per US dollar, which was facilitated by a sharp strengthening of the dollar against the backdrop of news about inflation in the United States. Thus, the yen weakened to levels last seen in mid-1990.

At the same time, an important event occurred — a bullish breakdown of the level of 152 yen per US dollar. This level is special due to the fact that in 2022, the weakening of the exchange rate to 152 yen per US dollar forced the Bank of Japan and the Ministry of Finance to intervene three times, as Reuters writes, to support the yen.

In 2023, it also acted as a barrier to growth. It also held back the market during March 2024 and early April.

But yesterday the level of 152 yen per US dollar did not survive.

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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.