official Daily Market Analysis By FXOpen

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Market Analysis: GBP/USD Dips While USD/CAD Could Extend Gains

GBP/USD is moving lower from the 1.2650 resistance. USD/CAD is rising and might aim for more gains above the 1.3620 resistance.

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

• The British Pound started a fresh decline below the 1.2615 support zone.
• There is a key bearish trend line forming with resistance near 1.2565 on the hourly chart of GBP/USD at FXOpen.
• USD/CAD is showing positive signs above the 1.3580 support zone.
• There was a break above a major bearish trend line with resistance near 1.3585 on the hourly chart at FXOpen.
  

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair started a fresh decline from the 1.2650 zone. The British Pound traded below the 1.2615 support to move into further a bearish zone against the US Dollar.

The pair even traded below 1.2565 and the 50-hour simple moving average. Finally, the bulls appeared near the 1.2515 level. A low was formed near 1.2514 and the pair is now attempting a recovery wave.

Immediate resistance on the upside is near a key bearish trend line at 1.2565 or the 50-hour simple moving average. It is close to the 50% Fib retracement level of the downward move from the 1.2615 swing high to the 1.2514 low.

The first major resistance on the GBP/USD chart is near the 76.4% Fib retracement level of the downward move from the 1.2615 swing high to the 1.2514 low at 1.2590.

A close above the 1.2590 resistance might spark a steady upward move. The next major resistance is near 1.2640. Any more gains could lead the pair toward the 1.2700 resistance in the near term.

Initial support sits near 1.2540. The next major support sits at 1.2515, below which there is a risk of another sharp decline. In the stated case, the pair could drop toward 1.2440.

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GBP/USD Analysis: Price Approaches Important Support

In November, the 1.25 level acted as resistance, but after a bullish breakout, it began to provide support (as shown by the black arrows).

However, recent events are increasing bearish pressure. Among them:

→ yesterday's news on inflation in the US, the values of which were in line with expectations. It is worth paying attention to Core CPI MoM, the values of which remain equal to 0.3%, or 3.6% in annual terms. This category includes prices for services where inflation is difficult to overcome. So Powell's oft-repeated words that “the path to 2% will be difficult” take on more relevance. Today, by the way, another speech by the head of the Fed is scheduled for 22:30 GMT+3. It will take place after the announcement of interest rates at 22:00 GMT+3, which is expected to remain unchanged.
→ news today that the UK economy contracted in October. GDP decreased by -0.3%, although -0.1% was expected. This could strengthen the case that the Bank of England at its meeting (tomorrow at 15:00 GMT+3) will signal a faster rate cut than in other countries.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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Will the BoE Reduce Interest Rates or Not? Markets Appear Nonchalant

The Bank of England is expected to keep interest rates at the current level at tomorrow's meeting and is not actively pursuing further increases in the near future. More intriguingly, economists are now contemplating the possibility of a reduction in interest rates in the upcoming new year. This development, if realised, could carry noteworthy implications for both the British public and businesses.

The potential shift in policy is anticipated to be welcomed by a broad spectrum of the British populace, encompassing both commercial entities and private individuals. The prospect of reduced interest rates holds the promise of easing financial burdens, particularly on mortgage payments. Such a scenario would likely translate into increased disposable income for the public, empowering them to resume previous spending patterns. Simultaneously, businesses could find relief as lower interest rates would facilitate easier servicing of monthly commitments, allowing for redirected funds towards development, growth, and expansion initiatives.

Comparisons with the economic landscape of the United States reveal distinctive differences in approach. While both the UK and the US faced challenges of inflation surges, the UK's inflation rate, though reduced, remains at a level of just over 5.6%. In contrast, the US has achieved a lower inflation rate of 3.2%. Despite this, the Bank of England is diverging from the US policy trajectory by contemplating a departure from further interest rate hikes.

A key metric distinguishing the two economies is the national debt, with the UK presenting a substantially lower debt level on both a percentage and per capita basis. Furthermore, the absence of financial institution collapses, a contrast to events in the US earlier in the year, contributes to a relatively more stable financial environment in the UK.

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EUR/USD, GBP/USD, USD/JPY Analysis: Dollar Falling ahead of Fed Report

At the upcoming meeting, the American department is not expected to take steps aimed at changing monetary parameters. At the same time, officials will likely abandon overly hawkish or dovish rhetoric and focus on incoming macroeconomic data. November inflation statistics were published yesterday: as expected, the rate of growth in consumer prices accelerated from 0.0% to 0.1% in monthly terms and slowed down from 3.2% to 3.1% in annual terms, and the figure does not take into account prices for food and energy adjusted from 0.2% to 0.3%. During the day, November statistics on manufacturing inflation will be published in the US: forecasts suggest a further slowdown in annual dynamics from 1.3% to 1.0%, while in monthly terms the indicator may show an increase of 0.1% after -0.5% in the previous month.
EUR/USD

The EUR/USD pair shows mixed trading dynamics, consolidating near the 1.0785 mark. According to the EUR/USD technical analysis, immediate resistance can be seen at 1.0822, a break higher could trigger a move towards 1.0842. On the downside, immediate support is seen at 1.0750, a break below could take the pair towards 1.0695.

Market activity remains subdued as market participants are hesitant to open new positions ahead of the US Federal Reserve's interest rate decision. The ECB will meet on Thursday. It is assumed that the regulator will also not change the parameters of monetary policy, but will indicate further maintaining the key interest rate at 4.50% for a long time. Today, investors will pay attention to the October statistics on industrial production in the eurozone: the indicator is expected to decline by 0.3% after -1.1% in the previous month, and in annual terms it may change from -6.9% to -4.6%.

During the week, a trading range formed with boundaries of 1.0723 and 1.0827. Now, the price has moved away from the upper limit and may continue to decline.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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EUR/USD Resumes Rally While USD/CHF Drops To Support

EUR/USD started a fresh increase above the 1.0890 resistance. USD/CHF declined and now struggling below the 0.8700 resistance.

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

• The Euro rallied after it broke the 1.0890 resistance against the US Dollar.
• There is a connecting bullish trend line forming with support near 1.0955 on the hourly chart of EUR/USD at FXOpen.
• USD/CHF declined below the 0.8705 and 0.8665 support levels.
• There is a key bearish trend line forming with resistance near 0.8665 on the hourly chart at FXOpen.
  

EUR/USD Technical Analysis

On the hourly chart of EUR/USD at FXOpen, the pair started a fresh increase from the 1.0740 zone. The Euro cleared the 1.0830 resistance to move into a bullish zone against the US Dollar, as mentioned in the previous analysis.

The bulls pushed the pair above the 50-hour simple moving average and 1.0890. Finally, the pair tested the 1.1000 resistance. A high is formed near 1.1009 and the pair is now consolidating gains. Immediate support on the downside is near the 1.0955 level.

There is also a connecting bullish trend line forming with support near 1.0955. It is close to the 23.6% Fib retracement level of the upward wave from the 1.0777 swing low to the 1.1009 high.

The next major support is the 50% Fib retracement level of the upward wave from the 1.0777 swing low to the 1.1009 high at 1.0890. A downside break below the 1.0890 support could send the pair toward the 1.0820 level. Any more losses might send the pair into a bearish zone to 1.0740.

Immediate resistance on the EUR/USD chart is near the 1.1000 zone. The first major resistance is near the 1.1020 level. An upside break above the 1.1020 level might send the pair toward the 1.1065 resistance.

The next major resistance is near the 1.1080 level. Any more gains might open the doors for a move toward the 1.1150 level.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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EUR/USD: Price Is Again Testing Psychological Level of 1.10

An eventful news background creates increased volatility in financial markets.

Unlike the Fed, whose rhetoric is becoming softer, Europe's central banks are sticking to plans to maintain tight policies. The ECB said yesterday that policy easing was not even discussed at its two-day meeting, the Bank of England said rates would remain high for an "extended period," and Norway's central bank even raised rates.

This caused the pound and euro to rise sharply yesterday against a weakened USD.

However, today is the day of publication of PMI indices in Europe, which show that the economy in Europe is in a difficult situation, as the values are below = 50:
→ French Flash Manufacturing PMI: actual = 42.0, expected = 43.3, previously = 42.9;
→ German Flash Services PMI: actual = 48.4, expected = 49.1, previously = 49.6.

The publication of PMI values today led to a sharp depreciation of the euro against the dollar, thus a correction occurred after a rally of two days.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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USD/CAD Analysis: Rate Reaches Its Minimum in 4 Months

On Friday, the rate dropped below 1.366 for the first time since the beginning of August. This was facilitated by fundamental drivers:

→ The US dollar weakens after the Federal Reserve meeting, which signaled the possibility of lowering interest rates next year. Powell said monetary tightening is likely complete and discussions about cuts are "on the horizon."

→ On the contrary, the Bank of Canada remains more hawkish. In a speech on Friday, its chief Tiff Macklem said it was too early to consider cutting interest rates as inflation remained stubbornly above target.

Also, the weakening of the US dollar could have been influenced by disappointing news about Flash Manufacturing PMI values in the US: actual = 48.2, expectations = 49.5, a month earlier = 49.4.

We wrote about bearish signs on the chart back on December 1st.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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Interest Rate ETF Diversifies Trading Portfolio at Poignant Time

Electronic trading has never been so advanced. Recently, a wave of demand for diverse instruments has emerged among many traders, and in keeping with such a demand, FXOpen has added 19 new exchange traded funds (ETFs), which are tradable on the TickTrader platform as CFDs on an over-the-counter basis.

One of the 19 ETFs which have been launched by FXOpen is the Global X Interest Rate Hedge ETF, under the ticker symbol RATE.

This ETF is traded on the New York Stock Exchange (NYSE) via the NYSE's Arca system, which is the venue's electronic communication network (ECN) that is used for matching orders as opposed to the NYSE's physical and electronic stock exchange on which specific stocks of companies are traded.

The Global X Interest Rate Hedge ETF is an actively managed exchange-traded fund crafted to hedge against rising long-term interest rates. There has been a degree of volatility in the Global X Interest Rate Hedge ETF over recent weeks; therefore, its debut onto the market on the TickTrader platform is poignant.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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EUR/USD, GBP/USD, USD/JPY Analysis: Dollar Recovers as Rate Cuts Are Not Expected

The dollar rose on Friday after Fed spokesman Williams tempered expectations for a rate cut and reiterated that the central bank remains focused on bringing inflation down to its 2% target. Williams was the first Fed official to speak since a policy meeting last week in which the central bank left its benchmark overnight interest rate unchanged at a range of 5.25%-5.50%. With rates stable, the big shift in the Fed's outlook was due to the possibility of monetary easing next year. Economic data released Friday signalled a pick-up in US business activity but also showed the manufacturing sector continues to struggle.
EUR/USD

According to the EUR/USD technical analysis, the pair is consolidating around the 1.0900 level. Immediate resistance can be seen at 1.1023, and a break higher could trigger a rise towards 1.1065. On the downside, immediate support is seen at 1.0896, a break below could take the pair towards 1.0855.

The euro weakened against the dollar on Friday after the euro zone's contraction in business activity unexpectedly deepened in December. The eurozone's preliminary HCOB manufacturing PMI remained stable at 44.2, missing market expectations of 44.6. Although eurozone manufacturing indicators remained stable, they fell below expected levels. Business activity in Germany, Europe's largest economy, contracted in December, raising concerns about the increased likelihood of a recession by the end of the year. In France, the decline accelerated faster than expected, driven by further deterioration in demand for goods and services in the eurozone's second-largest economy.

The previous ascending channel remains. Now, the price has moved away from the lower boundary and may continue to rise.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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USD/JPY and NIKKEI React to Bank of Japan Decision

This morning, the Bank of Japan decided to leave interest rates unchanged at -0.10%. Its head, Kazuo Ueda, stated that:
→ the chances that the current ultra-loose monetary policy will change in January are very small;
→ further decisions of the Bank of Japan will be based on incoming economic information.

Thus, rumors that the Bank of Japan might raise rates from the negative zone did not come true. As a result, the NIKKEI index rose to November highs, and the yen weakened.

The 4 hour USD/JPY chart shows that:
→ The price forms a downward channel (shown in red). The strengthening of the yen against the US dollar, observed since November, was caused by both rumors related to the Bank of Japan and the prospect of a rate cut by the Federal Reserve.
→ The lower border of the channel pushed the price upward on December 7, indicating support at 141.65.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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GBP/USD, EUR/USD, and USD/JPY Analysis: Yen and European Currencies Retreat from Recent Highs

The sharp decline in the US currency that we observed after the Fed meeting slowed down slightly towards the end of last week. Thus, the pound/US dollar currency pair rebounded from 1.2700, the euro/US dollar pair is consolidating after testing 1.1000, and buyers of the US dollar/yen pair found support just below 141.00.

GBP/USD

The pound/dollar currency pair failed to strengthen above 1.2750 and rebounded to 1.2600. At the moment, the pair is consolidating in a narrow range, which most likely requires a good fundamental impulse to exit. Today at 14:00 GMT+3, data on the index of industrial orders in the UK for December will be published. Also, at 16:00 GMT+3, it is worth paying attention to the speech of Sarah Breeden, a member of the Financial Policy Committee of the Bank of England. Tomorrow, the UK's core consumer price index for November is scheduled to be published.

On the GBP/USD charts with higher time frames, the price confidently stays above the alligator lines. If the price breaks above the upper fractal at 1.2790, the price rise may happen. We may consider a breakdown of the upward scenario after the price confidently consolidates below 1.2500.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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Bank of England Maintains Interest Rates at 5.25% Amidst Global Economic Dynamics

In a move that marks the third consecutive instance, the Bank of England has opted to maintain its benchmark interest rates at 5.25% on the 14th of December. While this decision deviates from the recent trend of relentless interest rate increases, it falls short of a rate cut, emphasising the central bank's cautious approach to monetary policy.

The Bank of England's choice to hold interest rates steady comes as a nuanced response to the prevailing economic climate. In a departure from the trajectory of continuous rate hikes that have characterised the central bank's policy during the course of 2022 and early 2023, the decision to maintain the status quo hints at maintaining conservatism and continuing to aim for the target 2% inflation for 2024.
Echoes of the Federal Reserve's Conservative Measures

In parallel to the current stance of the United States Federal Reserve, the Bank of England is embracing highly conservative measures by keeping borrowing rates relatively high. Despite the inflation rate in the UK being significantly lower than its double-figure peak over a year and a half ago at the onset of this policy, the central bank remains steadfast in its commitment to a conservative monetary approach.

MPC's Forward Guidance

The Bank of England's Monetary Policy Committee (MPC) justifies its decision by emphasising the need for continued restrictive borrowing conditions. While the inflation rate has experienced a substantial decline from its earlier peaks, the MPC asserts that the current inflation level remains above the target of 2% set for 2024. This forward guidance underscores the Bank of England's commitment to carefully navigating the delicate balance between economic growth and inflation control.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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S&P 500: Worst Day since September

The S&P 500 fell 70.02 points, or 1.47%, to 4,698.35 yesterday, according to Dow Jones Newswires. This is the largest one-day point decline since Thursday, September 21, 2023.

Of the 500 stocks in the index, only 19 closed in the green. Of these, Google shares, as the company announced plans to reorganize its advertising department, which employs 30 thousand people.

From a fundamental perspective, there were no obvious triggers that carried enough weight to cause the sharp decline. Moreover, the Consumer Confidence indicator was published yesterday, which showed that consumer confidence has increased the most since the beginning of 2021.

From the point of view of behavioral psychology and technical analysis, the sharp decline has reasonable explanations:

→ from the low of late October to the beginning of yesterday's session, the S&P 500 index grew by 16%. This is an impressive rally, fueled by expectations of easing inflation and interest rate cuts in 2024. A significant correction is a logical development of events.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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USD/CAD, AUD/USD, EUR/USD Analysis: Commodity Currencies Testing Important Marks

The penultimate five-day trading period of the past year turned out to be quite successful for commodity currencies. Thus, the AUD/USD pair is approaching the July extremes of this year, the USD/CAD pair has broken through the support at 1.3400, and the NZD/USD pair has confidently strengthened above 62. At the same time, European currencies failed to move above strategic levels and are slightly adjusted against the dollar.

USD/CAD

The USD/CAD currency pair lost more than 200 pips last week and strengthened below the alligator lines on higher time frames. The likelihood of a change in the vector of monetary policy by the American Federal Reserve is contributing to the strengthening of the downward trend in the pair. Yesterday, data on the US consumer confidence index for December was published, showing positive dynamics: 110.7 versus 103.8. This fundamental impulse allowed the pair’s buyers to find support at 1.3310 and rebound to 1.3370, but so far no upward dynamics have been observed.

Today at 16:30 GMT+3, it is worth paying attention to the publication of US GDP data for the third quarter. Also, at this time, the core Canadian retail sales index for October will be published. In addition to the data already mentioned, weekly figures on the number of applications for unemployment benefits in the United States will be released.

On the daily and weekly USD/CAD charts, the price is below the alligator lines, the AO and AC oscillators are red, which additionally indicates sales. The downward scenario may be cancelled if the price confidently consolidates above 1.3460-1.3500.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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Market Analysis: GBP/USD Aims Fresh Increase While EUR/GBP Rallies

GBP/USD is attempting a fresh increase from the 1.2610 zone. EUR/GBP is gaining pace and might extend its rally above the 0.8700 zone.

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

• The British Pound is trading in a bullish zone above 1.2600 against the US Dollar.
• There was a break above a key bearish trend line with resistance at 1.2640 on the hourly chart of GBP/USD at FXOpen.
• EUR/GBP started a fresh increase above the 0.8620 resistance zone.
• There is a major bullish trend line forming with support near 0.8640 on the hourly chart at FXOpen.
  

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair started a downside correction from the 1.2760 zone. The British Pound traded below the 1.2700 zone against the US Dollar.

A low was formed near 1.2611 and the pair is now attempting a fresh increase. There was a break above the 23.6% Fib retracement level of the downward move from the 1.2761 swing high to the 1.2611 low. Besides, there was a break above a key bearish trend line with resistance at 1.2640.

The pair is now trading above the 50-hour simple moving average and 1.2680. On the upside, the GBP/USD chart indicates that the pair is facing resistance near the 50% Fib retracement level of the downward move from the 1.2761 swing high to the 1.2611 low at 1.2685.

The next major resistance is near the 1.2705 level. If the RSI moves above 60 and the pair climbs above 1.2705, there could be another rally. In the stated case, the pair could rise toward the 1.2760 level or even 1.2790.

On the downside, there is a major support forming near 1.2600. If there is a downside break below the 1.2630 support, the pair could accelerate lower. The next major support is near the 1.2610 zone, below which the pair could test 1.2550. Any more losses could lead the pair toward the 1.2500 support.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

[FXOpen Trader]

Watch FXOpen's Market Year Wrap 2023 Video

Yearly Market Wrap With Gary Thomson: INDICES, OIL, TECH STOCKS, CURRENCIES, BANKS INFLATION

Get the latest scoop on the year's hottest happenings, all in one convenient video. Join Gary Thomson, the COO of FXOpen UK, as he breaks down the most significant news reports and shares his expert insights.

• Inflation
• Indices market - S&P 500, Nasdaq
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• Currencies - AUD/USD, GBP/USD, EUR/USD
• Bank demises
• Monetary policy - Interest rates
  

Stay in the know and empower yourself with our short, yet power-packed video. Watch it now and stay updated with FXOpen.

Don't miss out on this invaluable opportunity to sharpen your trading skills and make informed decisions.

FXOpen YouTube

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Solana Is the Fourth Largest Cryptocurrency by Capitalisation. But for How Long?

2023 turned out to be a good year for cryptocurrencies, especially given the depressing mood that reigned at the end of 2022.

From the beginning of 2023:

• Bitcoin increased in price by more than 150% – including due to rumours related to the approval of applications for a Bitcoin ETF;
• Ethereum rose by approximately 85%.
  

But what has been particularly impressive is the progress made by the Solana project. This is a decentralised blockchain platform, which is characterised by high speed and scalability — they are achieved through the use of a unique architecture based on the Proof-of-History (PoH) protocol. In 2023, Solana became the first blockchain platform to reach 50,000 transactions per second. And a number of large investment funds, such as Grayscale and CoinShares, have added SOL to their portfolios.

SOL is a token that is used to pay for transactions and services on the Solana platform. It can also be used for staking to help support the network. The SOL/USD rate in 2023 has increased by more than 1000%!

At the same time, SOL now ranks 4th in terms of capitalisation of cryptocurrencies — after BTC, ETH, and the USDT stablecoin. December was the month when the price of the SOL token exceeded the psychological level of USD 100 for the first time since April 2022 (the historical high reached in the fall of 2021 exceeds the USD 250 level for SOL).

But will the price be able to stay above USD 100?

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2023 In Review: A Look Back At The Highlights Of The Year

The year 2023 commenced after two years of economic uncertainty and heavy inflation across Europe and North America, home to leading financial markets, with major currencies such as the euro and the US dollar, and financial hubs including London, New York, Chicago, Frankfurt, and Toronto.

These continents, where major stock exchanges operate and the S&P 500, NASDAQ, and FTSE 100 indices represent the top stocks of the top listed companies in Britain and the US, witnessed a dynamic interplay of economic recovery, inflation challenges, and policy adjustments.

The European and North American economies had spent 2023 recovering from a sustained period of inflation and cost of living issues (Britain and mainland Europe), and in the US, yet more bank collapses and a close call with state insolvency as the US Government had to raise the debt ceiling to stop it defaulting on its existing commitments, highlighting the country's huge national debt.

Inflation did decline during 2023, but central bank policy on both sides of the Atlantic favoured continued increases in interest rates, despite the US inflation going down from 11% in mid-2022 to around 3.1% now, and the British inflation rate is 3.9% now whereas it was also in double figures during 2022. Now, we move on to looking at specific markets.

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Market Analysis: Dollar Corrects in Thin Market

The American currency is strengthening slightly after Christmas. Thus, the pound/US dollar currency pair retreated from the recent high just above 1.2700 and the US dollar/yen pair found support at 142.00. The euro/US dollar pair is trying to retest Friday’s high at 1.1040. Both the Australian and Canadian currencies continue to rise against the dollar.

USD/JPY

A block of data from Japan published this morning contributed to a slight strengthening of the USD/JPY pair, as the incoming fundamentals turned out to be quite weak. Thus, the core consumer price index (CPI) from the Bank of Japan decreased to 2.7% against the forecast of 3.00%. The price index for corporate services also fell: 2.3% versus 2.4%. Also in the red zone was the ratio of vacancies to applicants: 1.28 to 1.30. Today at 21:00 GMT+3, it is worth paying attention to the publication of data on the auction for the placement of 2-year US Treasury notes.

On the daily and weekly USD/JPY chart, the pair is below the alligator lines, the priority is to sell on the breakdown of the lower fractal at 140.90. We can consider cancelling the downward scenario if the price confidently consolidates above 145.00.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

[FXOpen Trader]

EUR/USD Extends Rally While USD/JPY Revisits Support

EUR/USD gained bullish momentum above the 1.0985 resistance. USD/JPY is declining and showing bearish signs below the 142.85 level.

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

• The Euro remained in a bullish zone and climbed above the 1.0985 resistance zone.
• There is a key bullish trend line forming with support near 1.1020 on the hourly chart of EUR/USD at FXOpen.
• USD/JPY is trading in a bearish zone below the 143.40 and 142.85 levels.
• There was a break above a major bearish trend line with resistance near 142.25 on the hourly chart at FXOpen.
  

EUR/USD Technical Analysis

On the hourly chart of EUR/USD at FXOpen, the pair started a fresh increase above the 1.0930 zone. The Euro climbed above the 1.0985 resistance zone against the US Dollar.

The pair even settled above the 1.1020 resistance and the 50-hour simple moving average. Finally, it tested the 1.1040 resistance. A high is formed near 1.1044 and the pair is now consolidating gains.

If there is a downside correction, the pair might test the 23.6% Fib retracement level of the upward move from the 1.0929 swing low to the 1.1044 high at 1.1020. There is also a key bullish trend line forming with support near 1.1020 and the 50-hour simple moving average.

The next major support is near the 50% Fib retracement level of the upward move from the 1.0929 swing low to the 1.1044 high at 1.0985.

If there is a downside break below 1.0985, the pair could drop toward the 1.0930 support. The main support on the EUR/USD chart is near 1.0910, below which the pair could start a major decline.

On the upside, the pair is now facing resistance near 1.1040. The next major resistance is near the 1.1065 level. An upside break above 1.1065 could set the pace for another increase. In the stated case, the pair might rise toward 1.1120.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

[FXOpen Trader]

Brent Oil Price Reaches New December High

Financial markets are experiencing a traditional decline in trading activity associated with the holiday period. Notable events:

    the S&P-500 and NASDAQ-100 stock indices updated their maximum for the year after the holiday Monday, thereby confirming the idea that the decline on Wednesday, September 20, was in the nature of a correction. Santa and his rally do not disappoint.
    The dollar index drops to six-month lows due to expectations of an interest rate cut in March 2024.
    The price of oil reached a new high in December.

The rise in oil prices is caused by geopolitical tensions:

    WSJ: Iran-backed militias fire at US bases in the Middle East.
    Bloomberg: Continued Houthi attacks on shipping and US strikes on targets in Iraq raise the risk of the war expanding in the Middle East.
    Reuters: The war in Gaza will last several months. Concerns about the spread of the conflict are growing.
    Barron's: Dispute between Venezuela and Guyana could threaten oil production and higher prices.

If military action disrupts the production and supply of oil, this could sharply increase its price.

The XBR/USD chart shows that:

    the price is still in a downtrend (as shown by the red channel);
    moving within the ascending channel (shown in blue) in December, the price has reached the upper limit of the red channel, and is now in a vulnerable position.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

[FXOpen Trader]

FTSE 100 Continues Pre-holiday Rally: Is 8000 in Sight?

Almost a year ago, the FTSE 100, which is a prestigious index comprising the most prestigious blue-chip stocks of companies listed on the London Stock Exchange, hit 8,000 points for the first time in history.

The euphoria that accompanied this historic breakthrough in mid-February 2023 echoed a similar response in 2021 when the index broke the 7,000 barrier for the first time ever. However, the brief venture above the 8,000 mark was relatively short-lived, and since then, the FTSE 100 index has languished anywhere between the mid-7,200 range up to the 7,700s during the last three quarters of this year.

Before the markets made their annual break for the holiday season that has just passed, the FTSE 100 index began to show a steady upward climb, which has been relatively consistent since October 27's low point of 7,259 at FXOpen.

Now, with the markets reopening this week, the FTSE 100's upward direction has continued to demonstrate buoyancy, and the possibility of reaching the lofty heights of 8,000 points is once again being openly discussed by market participants.

As the London trading session opened this morning, the FTSE 100 index jumped from 7,715 to 7,742 at FXOpen, giving further weight to opinions in mainstream media last week that a revisitation of the 8,000 mark may be in sight.

The reasons for this rally are being viewed by many analysts and commentators in a very basic form, largely centred on the possibility that central banks in Western continents, in which the main headquarters of companies listed in London and included in the FTSE 100 index, may reduce their interest rates as the talks about ending the prolonged policy of increasing them over recent years in an attempt to counter inflation.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

[FXOpen Trader]

ETH/USD Analysis: New Record of the Year

Today, the price of Ethereum exceeded the level of 2,440 per token, thereby setting a new high for 2023. It is noteworthy that the price of Bitcoin did not support the bullish sentiment, continuing to fluctuate around the USD 43,000 level for the fifth day.

What is the reason for the growth of ETH/USD from a fundamental point of view? There is no obvious trigger in the media, so we can only make assumptions:

→ market participants considered ETH an undervalued asset against the backdrop of the growth of Bitcoin and Solana;

→ perhaps buyers assume that after the expected approval of applications for the BTC ETF, the ETH ETF story will be next?

→ Santa's rally and the positive sentiment associated with it.

From a technical point of view, the price of ETH/USD moved up beyond the balance period “B”, where the forces of supply and demand were balanced. The bullish momentum was maintained, with upward momentum above the 2,333 level attracting followers and forcing short sellers to take losses. According to on-chain analytical platforms, in just one hour, at the peak of growth, USD 14 million of bearish positions were liquidated on cryptocurrency exchanges—there was a short squeeze in the market to some extent.

What's next? Will the price be able to form a new balance period “C”, which will be above the period “B” (similar to the trend “A” → “B”)?

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

[FXOpen Trader]

European Stock Index Shows Signs of Weakness

As the comparison chart shows, the ESX50 lags behind the US500. And this trend has been observed since mid-December, a period when central banks around the world published interest rate decisions and set expectations for the future. The divergence suggests that Europe's central bankers are in no rush to join the US turn to lower interest rates — even as investors continue to insist that they will have to accept easier monetary policy soon enough.

According to Bloomberg, after Federal Reserve Chairman Jerome Powell signalled that the focus is now on lowering borrowing costs, colleagues from Frankfurt to London said that a further slowdown in inflation cannot be taken for granted. That is, for now in Europe, policy easing is not yet on the agenda.

“We should absolutely not lower our guard,” European Central Bank President Christine Lagarde told reporters in December, while her Bank of England counterpart Andrew Bailey noted there was “still work to be done” in the fight to rein in consumer prices.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

[FXOpen Trader]

Brent Crude Oil Dips Back Below $80 Mark Despite Middle East Escalation

The commodities market is a wide-ranging and varied one, largely because the different physical products represent different uses. Oil is one of those rare commodities that is an actual consumable item, and due to its nature as a staple raw material for fuel production, combined with its concentration within certain countries that extract and sell it, its value is often intrinsically linked to geopolitical events and economic circumstances.

Currently, Brent Crude Oil is under some degree of observation by analysts and market participants due to its steadily decreasing value which has been consistent for the most part over the past two and a half months since the beginning of the war, which is taking place in the Middle East, a contrary pattern to what may be expected, when ordinarily circumstances like this cause increases.

Historically, oil prices across the board have been dramatically affected by wars involving Israel and its neighbouring countries, largely because many of the OPEC countries which supply oil globally are Middle Eastern nations and members of the Arab League.

For example, in 1973, during the Yom Kippur War, the OPEC nations imposed an oil embargo against the United States in an attempt to reverse the decision by the US government to supply weapons and funding to the Israel Defense Forces, resulting in fuel rationing and the imposition of a 55 miles per hour speed limit, as well as spiralling oil prices.

Despite the discourse from many OPEC countries relating to the current political situation and the escalation of war between Israel and the Gaza Strip, the price of Brent Crude Oil has actually decreased over recent days. During these recent days, there has been further escalation to the extent that other surrounding nations may begin a campaign against Israel.

On December 26, Brent Crude Oil was trading at $80.50 per barrel at FXOpen; however, by the next day, it returned to below the $80 per barrel mark and hit $79.15 at FXOpen at the end of trading yesterday before a slight rebound in the very early hours of the morning to $79.52 at FXOpen.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.