Market Analysis By FXOpen
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E-mini S&P-500 Start Quarter at Historic Highs
On Friday, data from the Personal Consumption Expenditures (PCE) index was published. According to Trading Economics, the PCE price index report showed that inflation is slowing. On a monthly basis, it grew by 0.3% in February, forecast = 0.4%, a month ago = 0.4%.
Following the release of the PCE index, Jerome Powell stated that:
→ the Fed is in no hurry to cut interest rates;
→ the latest PCE inflation data is in line with what the Fed wants to see.Market participants received a portion of fundamental information positively. And since Friday was a day off on the stock market, the news is taken into account by the price on Monday.
The E-mini S&P-500 opened with a gap this morning, and at a historical peak. The S&P 500 rose 10.2% in the first quarter, its best performance since 2019. The bull run is fueled by both expectations of Fed interest rate cuts and enthusiasm surrounding the adoption of AI.
The S&P 500 chart shows that:
→ The price moves in an ascending channel (shown in blue), demonstrating stable demand.
→ The price has broken through the resistance level of 5,200. It is acceptable to expect that it will act as resistance.
→ The market can be supported by the median line.TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG
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High Hopes for Amazon as Analysts Look at Earnings Call Potential
Amazon, one of the most successful e-commerce businesses in the world, entered its 30th year in 2024 with its relatively humble yet ingenious origins as an online bookseller based out of Jeff Bezos' garage in Washington State, a distant memory.
Today's Amazon is completely unrecognizable. A global giant among Silicon Valley's big-cap internet moguls, dominating the internet services and retail delivery sectors in most markets worldwide.
Not resting on its laurels, Amazon, one of the 'Magnificent 7' tech stocks, has been actively sharpening its remit recently, with a commitment to the development of AI being one of the areas of innovation that the company is now heavily invested in.
Amazon's stock has been doing very well so far this year, and when the US market closed yesterday after its first trading day following a long holiday weekend, trading appeared to continue where it left off on Thursday, March 28, which was the final trading day of the first quarter of this year, with Amazon stock being at its highest value since November 2021 when it spiked to just over $183 per share before climbing down shortly afterwards.
The tech stock doldrums of 2022 ensued, and Amazon, despite its evergreen parcel delivery enterprise being its distinguishing factor from other internet and high technology giants, was not immune. The lull in value during that period was sustained, but as investor appetite for tech stocks came back, Amazon began to grow its share price once again.
This year so far, Amazon stock has been one of the top risers, and according to FXOpen pricing, Amazon closed yesterday at a lofty $180.38, which represents the highest point since it began this particular rally on January 9, at which point it was trading at $127.22. That is a considerable increase within the space of just under two months.
→ The market can be supported by the median line.TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG
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The Dollar Resumes Growth after the Release of Positive Macroeconomic Statistics
Weak market volatility associated with the celebration of Catholic Easter and a strong foundation from the United States contributed to a sharp strengthening of the dollar against commodity and European currencies. Thus, the pound/US dollar currency pair is trading below the key support at 1.2600, euro sellers are preparing to test 1.0700, and the US dollar/yen pair is as close as possible to recent extremes at 152.00.
GBP/USD
The data on the US manufacturing business activity index for March published yesterday was at the level of 50.3 points, which significantly exceeded the analysts' forecast of 48.3 points. The released data reduces the likelihood of a reduction in the base interest rate at the next Fed meeting and naturally leads to strengthening of the American currency in almost all directions.The GBP/USD pair traded between 1.2700 and 1.2600 for about a week. Yesterday, sellers of the pound were stronger than buyers and the pair lost about 100 pp in just a couple of hours. If the current mood in the market continues, the price on the GBP/USD chart may test the low of February of this year at 1.2518. We can consider canceling the downward scenario if we confidently consolidate above 1.2700.
Today at 11:30 GMT+3, we are waiting for data on the volume of consumer lending from the Bank of England for February. Also at the same time, the manufacturing business activity index (PMI) for March will be published.
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US Dollar Strengthens after Strong ISM Manufacturing PMI Report
Yesterday, news was published on the state of the US manufacturing sector, namely the Purchase Manager Index (PMI), which is calculated by The Institute for Supply Management (ISM).
The data turned out to be strong: fact = 50.3, forecast = 48.5, a month earlier = 47.8.
Since readings above 50 indicate manufacturing growth, yesterday's news showed the health of this sector in the US. Consequently, it reduced the pressure on the Fed to cut interest rates.
And since the current tight monetary policy may last longer, the value of the US dollar has increased relative to other financial assets:
→ Regarding currencies. For example, the NZD/USD rate set a minimum of 2024.
→ Regarding cryptocurrencies. The decline in BTC/USD that began yesterday led to the Bitcoin rate dropping to USD 66.5k today.
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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 -
Gold Price XAU/USD Sets Another All-time High
The XAU/USD gold chart today indicates that the price of the metal has exceeded USD 2,250 per ounce.
Causes:
→ Geopolitical tensions. Military conflicts in Ukraine and the Middle East do not subside, the threat of terrorist attacks is growing, and new hot spots may appear on the world map.
→ Concerns about a new round of inflation due to rising commodity prices.In both cases, gold acts as a safe-haven asset.
Since the beginning of 2024, the price of XAU/USD has risen by 12%. How much longer can the rally last?
In terms of technical analysis of the gold price, there are two tools to take into account:
→ ascending channel (shown in blue). Today XAU/USD is in its upper half, the price has tested (shown by the arrow) the support of the median line. And from the first days of April it has been demonstrating dynamics that direct it towards the upper border of the channel.
→ Fibonacci proportions. If we take the A→B impulse as 100%, then the decrease in B→C finds support in the zone of levels 0.5-0.618, which confirms the relevance of using proportions. Then the target for impulse price growth from point C may be the level of 1.618.
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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: EUR/USD Starts Recovery, USD/CHF Could Extend Gains
EUR/USD is attempting a recovery wave from the 1.0725 zone. USD/CHF climbed higher above 0.9070 and might extend gains in the near term.
Important Takeaways for EUR/USD and USD/CHF Analysis Today
· The Euro declined toward 1.0725 before it started a recovery wave against the US Dollar.· There was a break above a key bearish trend line with resistance at 1.0765 on the hourly chart of EUR/USD at FXOpen.
· USD/CHF climbed higher above the 0.9035 and 0.9070 resistance levels.
· There was a break above a major bearish trend line with resistance at 0.9035 on the hourly chart at FXOpen.
EUR/USD Technical Analysis
On the hourly chart of EUR/USD at FXOpen, the pair extended the decline below the 1.0785 support zone. The Euro even declined below 1.0750 before the bulls appeared against the US Dollar, as mentioned in the previous analysis.The pair traded as low as 1.0724 and recently started a recovery wave. There was a move above the 1.0745 resistance zone. Besides, there was a break above a key bearish trend line with resistance at 1.0765.
The bulls pushed the pair above the 50-hour simple moving average and the 50% Fib retracement level of the downward move from the 1.0805 swing high to the 1.0724 low.
Immediate resistance on the EUR/USD chart is near the 1.0785 zone. It is close to the 76.4% Fib retracement level of the downward move from the 1.0805 swing high to the 1.0724 low. The first major resistance is near the 1.0805 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.
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 -
USD/JPY Analysis: Calm Before the Storm?
The USD/JPY chart today shows that the rate has stabilized at 152 yen per US dollar. But can we say that there is calm in the market?
Hardly.
First, it is important to note that in 2023 there was a sharp reversal of trend around the 152.00 level due to intervention by the Japanese authorities, which supported an excessively weak yen. Therefore, crossing this psychological threshold can serve as a trigger for a new intervention.
Secondly, Reuters writes about a growing volatility premium in the options market, which confirms the growing likelihood of a strong trend in the near future.
According to USD/JPY technical analysis:
→ ADX indicator is near its lows. When this situation was observed at the end of February, 2 sharp movements followed in March: a decline in USD/JPY to 146.6 and a subsequent recovery to 151.6.
→ the price of USD/JPY today is squeezed into a narrowing triangle between the level of 152.0 and the median line of the ascending channel. The price exiting the technical triangle may mean the beginning of a new trend.Today, 2 important news are expected: after the publication of the ISM Services PMI index (at 17:00 GMT+3), a speech by the head of the Federal Reserve is expected (19:10 GMT+3). A piece of fundamental news could change the valuation of the US dollar and lead to a surge in volatility in the USD/JPY market - this should be given special attention, given the arguments presented.
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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 -
Brent Oil Price Reaches Its Highest Since October 2023
The Brent oil chart today shows that the price has exceeded USD 89 per barrel — this is the highest level since the end of October 2023.
Reasons for strong demand for oil:
→ The OPEC+ meeting ended this week. Exporting countries maintained their policy of limiting oil production unchanged.
→ Ukrainian drone attacks on oil refineries in Russia.
→ Latest data on the strength of the US economy.
Technical analysis of the Brent market shows that:
→ The price moves within the ascending channel (shown in blue), which originates back in 2023.
→ Increased demand in the spring of 2024 led to the fact that the Brent price rose into the upper half of the blue channel and formed a steeper growth trajectory (shown by black lines).
→ The median line of the blue channel acted as support (shown by arrows).The upper limit of the blue channel is around USD 92 per barrel of Brent and it is possible that the price may reach these values in the next 1-2 months.
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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 US Stock Market Awaits the Publication of NFP And Unemployment Data
Important events of this week for investors and traders in the US stock market could be the employment news, which will be published tomorrow at 15:30 GMT+3:
→ non-Farm Payrolls (NFP) report for March. According to CNN, analysts expect nonfarm payrolls to rise by 192,500 in March. NFP for February was 275,000, according to FactSet.
→ data on the unemployment rate (Unemployment Rate). According to ForexFactory, the unemployment rate is expected to remain unchanged at 3.9%.The state of the labour market is under close scrutiny by the Fed and could provide valuable insight into the prospects for interest rate cuts. The release of the unemployment rate and NFP numbers for March could be an example of what is called "bad news is good news" on Wall Street. After all, if the data shows a deterioration in the labour market, then this will be an argument for the Fed to lower interest rates, which in turn could lead to an increase in the stock market.
Indeed, according to CNN, Fed Chairman Jerome Powell said last week that a weakening labour market would be a reason to cut interest rates.
However, the S&P 500 chart shows the price moving within an ascending channel, but showing signs of weakness around the 5,250 level on the 4-hour period:
After a sharp increase in A→B, the price entered a prolonged correction B→C - this may be a sign of a large volume of sell orders near the level of 5,250, which absorbed the bullish impulse A→B.
An attempt to break through the level of 5,250 (price growth to top D) turned out to be a failure, as the price sharply dropped from the upper border of the channel to the lower one. Such progress should be alarming for the bears.
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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 -
Analytical EUR to GBP Predictions for 2024 and Beyond
Navigating the dynamic and complex world of currency trading, especially within the EUR/GBP pair, requires a deep dive into economic trends, monetary policy shifts, and geopolitical events. This FXOpen article aims to unravel these intricacies, offering insights into the recent performance and future outlook of the euro against the pound sterling.
Recent Performance of the EUR/GBP Pair
The EUR/GBP exchange rate has experienced strong volatility since the UK decided to leave the European Union in June 2016, causing the pound to fall sharply against the euro. EUR/GBP surged from 0.737 at 2016’s open to a high of 0.93 in October of the same year.
Between 2017 and 2019, the pair ranged between 0.831 and 0.932, reflecting ongoing Brexit negotiations and political uncertainty within the UK and the EU.
However, the official departure of the UK from the EU in January 2020 marked a pivotal moment, with markets forced to contend with this new reality.
Throughout 2020, the COVID-19 pandemic further exacerbated these economic uncertainties. The euro initially strengthened against the pound as investors rushed to the relative safety of the euro, spiking from a low of 0.828 in February 2020 to a high of 0.949 in March before declining. By the end of 2020, the EUR/GBP was priced at 0.893.
2021 was characterised by the economic recovery post-pandemic, with both regions implementing fiscal stimulus measures. The pace of recovery, however, was uneven, as vaccine rollouts and reopening plans varied significantly between the UK and the Eurozone. These disparities led to fluctuations in the EUR/GBP exchange rate, but with a stronger pound ultimately leading the pair to conclude 2021 at 0.84.
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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 -
What Are UK Interest Rates Predicted to Be in 2024–2026?
Navigating the complexities of UK interest rates requires insight into current trends and future projections. This article delves into the analysis for 2024, long-term forecasts and speculative outlooks over the next ten years, examining analytical predictions for traders and investors. For those in the UK, understanding these dynamics will be crucial for engaging with the markets effectively in 2024 and beyond.
Current UK Interest Rate Environment
The UK's interest rate landscape has undergone significant transformations over the past few years, culminating in the current rate of 5.25% (as of the time of writing, the 22nd of March, 2024). This figure—the highest in UK interest rates history since 2008—marks a steep ascent from the historic low of 0.1% in December 2021, illustrating the Bank of England (BoE) Monetary Policy Committee's (MPC) aggressive stance against inflationary pressures.The decision to elevate interest rates from near-zero levels was primarily driven by the need to counteract rising inflation, which has emerged as a considerable threat to the UK's economic stability.
The trajectory of UK interest rates from the depths of the COVID-19 pandemic-induced lows to their current levels mirrors the broader effort to stabilise the economy in the face of unprecedented challenges. Initially, in response to the pandemic, borrowing costs were slashed to 0.10% in March 2020, setting a record low aimed at stimulating economic activity. However, as inflation began to surge, largely fueled by recovering demand and supply chain disruptions, the MPC shifted its strategy towards tightening monetary policy.
By 2023, the landscape of interest rate predictions had experienced dramatic revisions. Early forecasts suggesting a rise to as high as 6.5% were recalibrated following a summer of unexpectedly positive inflation data. This adjustment has set the stage for the current environment, where the peak rate of 5.25% is viewed as the maximum in this hiking cycle. However, inflation still remains above the BoE’s target of 2%, currently at 4% as of February 2024.
Inflation's persistence above the target highlights the delicate balance the Bank of England seeks between controlling price increases and fostering economic growth. The current higher interest rate regime impacts mortgages, loans, and savings, directly influencing household and business finances, particularly those with variable rate agreements.
With the UK recently slipping into a technical recession, the BOE is under pressure to cut borrowing costs in 2024. But, given that inflation is still elevated, 2024 base rate predictions in the UK remain relatively uncertain.
Economic Analysis and Interest Rate Forecast for 2024
2024 BoE interest rate predictions are closely tied to a balancing act between combating inflation and stimulating economic recovery amidst a technical recession. The MPC maintained the base rate at 5.25% in March 2024 with a cautious eye on inflation, which, although reduced from its peak, remains above the target of 2% at 3.4% in February 2024.This stubbornly high inflation rate, combined with the UK's recent entry into a technical recession—marked by negative economic growth in the fourth quarter of 2023—presents a complex backdrop for interest rates in the UK in 2024.
The technical recession reflects underlying economic vulnerabilities, including structural weaknesses in the labour market, low productivity growth, and the BoE's hesitance to provide clear forward guidance. This scenario has led to increased speculation about the timing and nature of interest rate adjustments.
The MPC's decision-making process is further complicated by global economic factors, notably slowing growth in major economies such as Germany and China, which indirectly impact the UK through trade and investment channels.
Inflationary pressures, partly attributed to global conflicts and supply chain disruptions, including those exacerbated by the Israel-Hamas conflict and the impact on shipping routes through the Red Sea, present additional challenges for UK interest rate forecasts in 2024. These factors have led to increased shipping insurance costs, potentially fuelling UK inflation further through higher transport costs and final goods prices.
Despite these pressures, there are signs that the BoE might lean towards monetary easing in 2024. Traders have notably adjusted their expected interest rate bets, with a significant shift towards expecting cuts by mid-2024, influenced by steady inflation levels and signals of potential easing in energy bills. The labour market shows resilience, with unemployment dropping to 3.8% in the last quarter of 2023, suggesting that the economy might bear the current interest rate environment a bit longer.
However, the BoE's future actions will heavily depend on forthcoming economic data, particularly in relation to inflation and wage growth. While some interest rate predictions in the UK forecast cuts as early as the second quarter of 2024, these predictions are speculative. They reflect a market consensus that central banks, including the BoE, will begin easing cycles between June and September 2024, continuing into the middle of the next year.
To explore how the UK’s shifting monetary policy might affect British markets, like GBP/USD and the FTSE 100, consider using FXOpen’s free TickTrader platform to analyse real-time charts and data.
UK Interest Rate Predictions for 2024
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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: AUD/USD and NZD/USD Remain In Uptrend
AUD/USD is correcting gains from the 0.6620 zone. NZD/USD is also moving lower and might attempt a fresh increase from 0.6000.
Important Takeaways for AUD USD and NZD USD Analysis Today
· The Aussie Dollar started a downside correction from 0.6620 against the US Dollar.· There is a key bullish trend line forming with support at 0.6550 on the hourly chart of AUD/USD at FXOpen.
· NZD/USD is also moving lower below the 0.6030 support zone.
· There is a major bullish trend line forming with support at 0.5995 on the hourly chart of NZD/USD at FXOpen.
AUD/USD Technical Analysis
On the hourly chart of AUD/USD at FXOpen, the pair started a fresh increase from the 0.6480 support. The Aussie Dollar was able to clear the 0.6535 resistance to move into a positive zone against the US Dollar.There was a close above the 0.6550 resistance and the 50-hour simple moving average. Finally, the pair tested the 0.6620 zone. A high was formed near 0.6619 and the pair is now correcting gains.
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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 -
How Do Dovish and Hawkish Monetary Policies Affect Markets?
In the intricate dance of global finance, central banks play a leading role, their policies echoing through markets and economies. The terms "dovish" and "hawkish" encapsulate their strategies towards interest rates and money supply, each with profound implications for currency values and investor strategies.
This FXOpen article explores how these stances offer valuable insights for traders in understanding the forex market’s movements and the broader economic landscape.
Understanding Dovish vs Hawkish
In the world of economics, central banks use monetary policy to navigate between stimulating growth and controlling inflation. This delicate balance is often characterised by two primary stances: dovish and hawkish. Understanding these policies is crucial for traders, as they significantly influence domestic economic conditions and the forex market.Dovish Meaning
Central banks take a dovish monetary policy stance, aiming to stimulate the domestic economy. By lowering interest rates or keeping them low, central banks make borrowing cheaper, encouraging both businesses and consumers to take loans, invest, and spend. This increase in spending can lead to economic growth, but there's a catch: if the money supply increases too rapidly, it might outpace the economy's growth potential, leading to inflation.In terms of unemployment, dovish policies can lead to job creation as businesses expand. Credit conditions become more lenient, fostering an environment ripe for economic activity.
Hawkish Meaning
Conversely, a hawkish stance aims to temper inflation and stabilise the economy when it shows signs of overheating. By raising interest rates, central banks make borrowing more expensive, which can cool down excessive spending and investment. This tightening of credit conditions is intended to prevent inflation from rising too high, too quickly.While higher interest rates can attract foreign investment due to the promise of higher returns, leading to an appreciation of the domestic currency in the forex market, they can also dampen economic growth and increase unemployment rates as financing becomes costlier for businesses. Likewise, a stronger currency can affect exports by making them more expensive for foreign buyers, which is a critical consideration for traders analysing trade-heavy economies.
Capital Flows and the Forex Market
The interplay between these monetary policies and capital flows is a critical aspect for forex traders.All else being equal, dovish policies, while boosting local economies, can lead to capital outflows as investors search for higher yields, causing the domestic currency to depreciate against its counterparts. However, a dovish policy can increase the attractiveness of investing in local stock markets due to cheaper borrowing costs.
On the other hand, hawkish policies attract foreign capital, appreciating the domestic currency, but potentially at the cost of slowing domestic economic growth.
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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 -
TSLA Analysis: Price Recovers after Disastrous Report
We previously wrote that lower vehicle deliveries could lower TSLA's stock price.
And as it became known on Tuesday, Tesla, led by Elon Musk, delivered just 386,810 cars in the first three months of 2024 - 14% below analysts' forecasts, according to Bloomberg. As a result, Tesla shares fell 4.9% that day, extending their 2024 decline to 33%, the worst performance in the Nasdaq 100 Index.
What is the market outlook?
Bullish arguments:
→ After a strong disappointment on Tuesday, the price of TSLA showed signs of stability on Wednesday and Thursday. Since these were bullish candles, and the market was recovering despite the non-bearish gap on Tuesday, this can be interpreted as a sign of demand.
→ From the point of view of technical analysis, the market is supported by the lower border of the downward channel (shown in red). The price forms rebounds from this border, as shown by the arrows.
→ Bloomberg writes about a decrease in the number of short positions after the report on Tuesday. This could be a sign that short position holders do not see any further decline in the price of TSLA and are taking profits.Bearish arguments:
→ TSLA price is still in the lower half of the downward channel, despite the bullish sentiment in the stock market.
→ Resistance may come from the level of USD 183 per share and the median line of the descending channel.
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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 -
BTC/USD Analysis: Bearish Arguments Become More Convincing
On March 18, we wrote about the activation of bears near the USD 70,000 level and the likelihood of consolidation forming near this psychological mark.
On March 25, we wrote that anxiety remains in the Bitcoin market.
Technical analysis of the BTC/USD chart with new data on the behavior of Bitcoin prices today relative to the previously designated levels and lines shows that bearish arguments are becoming more convincing:
→ the median line of the ascending channel acted as resistance (shown by the first arrow);
→ the price has formed a consolidation zone (shown in green) with a subsequent bearish exit from it;
→ after a bearish breakdown of the lower border of the ascending channel, it showed signs of resistance (shown by the second arrow);
→ the increase in B→C is about 50% of the decrease in A→B, which corresponds to the proportion of the normal intermediate recovery within the dominant bearish trend.Attempts to reach the level of USD 70k for Bitcoin in April were unsuccessful. The inability of the cryptocurrency price to demonstrate bullish dynamics is alarming due to the approaching halving, which is considered a positive factor influencing the price of Bitcoin.
It is possible that further developments will provide more turning points for building a downward channel.
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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 -
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%.
According to the technical analysis of the BTC/USD chart today:
→ From April 2-4, there was no downward pressure on the market to push the price below the lower boundary of the ascending channel (shown in blue), which remains relevant.
→ Conversely, a series of higher lows forming since April 2 indicates bullish intentions to break above the descending channel (shown in red).
Therefore, the approaching halving and associated positive expectations could lead to:
→ Breaking above the consolidating zone (shown with black lines).
→ Overcoming a significant resistance level near the psychological mark of $70,000 per coin.
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.
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 -
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.
This steady decrease in value goes hand in hand with reports over the weekend having revealed that house prices in the United Kingdom had decreased by 1% in March compared with those of February, giving an overall uninspiring outlook to a reasonably well-organised but stagnant British economy.At the end of last week, Chancellor of the Exchequer (British term for Finance Minister) Jeremy Hunt alluded to inflation in the United Kingdom being at its lowest for two years, however prices are still rising and the cost of living crisis, whilst out of the headlines of the sensationalist tabloid media, is still an existent problem in an economy in which average incomes have seen limited growth for nearly 20 years.
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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 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."
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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 -
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.
Despite the recent tech stock boom, NASDAQ's Tech 100 stocks are relatively flat, having concluded yesterday's trading session at 18,116.1 points according to FXOpen pricing, a far cry from the 18,414.7 reached on the last day of March.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.
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 -
How Can You Trade Using Order Flow? 3 Trading Strategies
Understanding the intricacies of order flow trading unlocks the door to deeper market insights, revealing not just the movements of prices but the forces driving them. In this FXOpen article, we’ll explore how order flow works, its components, and how it can be used within three comprehensive trading strategies.
Understanding Order Flow Trading
Understanding order flow in trading involves examining where buy and sell orders might rest in the market. Essentially, it's about understanding the action behind price movements rather than just the movements themselves. At its core, order flow reveals where traders are placing their orders and at what price, offering a glimpse into the potential future direction of the market based on the current levels of buy and sell orders.When traders talk about order flow, they're looking at the accumulation of these orders at various price levels, which can indicate areas of strong buying or selling pressure.
For instance, a significant number of buy orders at a certain price level might suggest a strong demand at that level, potentially leading to a price increase if sell orders cannot match this buying pressure. Conversely, an abundance of sell orders could indicate a supply level that, if not met with equal buying interest, might drive prices down.
Components of Order Flow Chart Trading
In the realm of trading, dissecting the order flow is akin to peering into the heart of the market, revealing the intentions of traders through the movement of buy and sell orders. Here's a closer examination of the core order flow indicators.Understanding these components allows traders to interpret order flow directly from the chart, providing insights into where the market might head next based on past and present trader actions.
Order Blocks (Supply and Demand Zones)
In analysing order flow on a chart, order blocks, or supply and demand zones, appear as areas where price action has shown significant movement away from a particular level, indicating a concentration of buy (demand) or sell (supply) orders.These zones are typically highlighted by a sudden surge or drop in price, leaving behind a footprint where future price often reacts. For example, a demand zone might be identified by a rapid price increase from a specific area, suggesting buyers overpowered sellers significantly.
Most importantly, when the price returns to one of these areas, it’ll typically reverse.
Market Structure/Trends
The market structure, or trend, is visible through the series of highs and lows on a chart. An uptrend is recognised by ascending peaks and troughs, while a downtrend is marked by descending peaks and troughs. These structures show order flow traders the prevailing direction of market sentiment.Imbalances
Imbalances manifest as large, directional candles that break away from a consolidation area, signifying a sudden imbalance between buyers and sellers, usually with little to no pullbacks. These are often accompanied by increased volume, which may suggests a strong commitment from traders to move the price in a specific direction.Volume
Volume is directly observable on a chart, usually depicted as bars beneath the price action. High volume bars accompanying significant price moves validate the strength of that move, implying a robust interest from the market in that price level. Conversely, low volume may indicate a lack of conviction, suggesting that the price move may not be sustainable.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.
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
