Market analysis FXOpen

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Market Analysis: EUR/USD Rallies Post US CPI While USD/JPY Takes Hit


EUR/USD started a fresh increase above the 1.0775 resistance. USD/JPY is declining and showing bearish signs below the 151.00 level.

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

• The Euro is rising and trading well above the 1.0835 resistance zone.
  
  
• There is a key bullish trend line forming with support near 1.0775 on the hourly chart of EUR/USD at FXOpen.
  
  
• USD/JPY is trading in a bearish zone below the 151.00 and 150.70 levels.
  
  
• There was a break below a major bullish trend line with support at 151.65 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 1.0660 zone. The Euro climbed above the 1.0750 resistance zone against the US Dollar.

The pair even settled above the 1.0775 resistance and the 50-hour simple moving average. Finally, it tested the 1.0885 resistance. A high is formed near 1.0887 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 1.0665 swing low to the 1.0886 high at 1.0835. The next major support is forming near a key bullish trend line at 1.0775.

The trend line is close to the 50% Fib retracement level of the upward move from the 1.0665 swing low to the 1.0886 high. The next key support is near the 50-hour simple moving average at 1.0750. If there is a downside break below 1.0750, the pair could drop toward the 1.0705 support. The main support on the EUR/USD chart is near 1.0660, below which the pair could start a major decline.

On the upside, the pair is now facing resistance near 1.0885. The next major resistance is near the 1.0920 level. An upside break above 1.0920 could set the pace for another increase. In the stated case, the pair might rise toward 1.0980.

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MSFT Analysis: New All-time High


Yesterday, Microsoft's share price exceeded USD 375 for the first time ever. This happened against the backdrop of news about the company’s activities, which was favorably received by investors:

-> Microsoft introduced its own Maia 100 chip for cloud computing and AI programs that create content. The company is also testing Maia 100 for Bing and Office.
-> The company also presented Cobalt - a server processor,
-> and more: new AI tools from the Copilot series. For example, Copilot for Azure is an AI assistant for clients of a cloud computing service that works in chat mode.

Expectations that the Fed will cut rates, which intensified following Tuesday's inflation news, is another factor contributing to the bullish sentiment in Microsoft shares.



The graph shows that:

-> the level of USD 350 per share, which served as resistance, has been broken. Now you can expect support from him;
-> an inverted head-and-shoulders formation remains below.
-> MSFT price is near the median line of the rising channel (shown in blue), where supply and demand tend to balance out, so some consolidation after the November rally looks in order.

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NIKKEI Analysis: High of 33 Years


The Japanese stock market index, made up of shares of 225 companies, is showing high volatility today, attempting to break through the September high. Reuters wrote that the index had reached its highest level since 1990. The record is due to low rates from the Bank of Japan, which are helping the country's export-oriented industry (in particular, the automobile industry) and financial sector to grow.

At the same time, in various financial markets, Nikkei-related instruments may not have recorded a maximum in 33 years - the reason is liquidity and what appears to be the top of the market:

-> there was a massive liquidation of short positions;
-> major market participants recorded profits.



Therefore, the daily candlestick on European Monday morning has a long upper shadow. Note that today's high could be a false breakout of the September top, which in turn is a false breakout of the August top.

The chart shows that the price of NIKKEI is forming a tapering wedge pattern (shown with blue lines) pointing upward. A bearish breakout of this pattern could lead to the development of a downtrend.

Something similar (but in a mirror image) was recorded at the end of October, when a downward wedge formed on the chart (shown by red lines, more clearly visible on the 4-hour chart). The breakout of this wedge led to a rally of over 9%.

If the NIKKEI enters a downtrend, it could be fueled by rumors of an end to the low rate policy. Experts in the media are increasingly predicting this move by the Bank of Japan.

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FTSE 100 Volatility Alongside BoE Interest Rate Commentary


In a week marked by market undulations and anticipation of pivotal fiscal policy updates from the British government, the FTSE 100 opened on a cautious note. Ashtead Group, a prominent equipment rental firm, set a sombre tone for the week as its shares plummeted on a downbeat annual profit outlook. Investors, meanwhile, remained on the edge of their seats, eagerly awaiting insights into the evolving fiscal landscape and potential policy shifts in Parliament.



As the week unfolded, the FTSE 100 experienced a delicate dance of gains and losses. Amid this volatility, the index slipped by 0.1% by 09:53 GMT on Monday. The sterling, however, exhibited resilience, strengthening by 0.2% against the dollar. Notably, the FTSE 100 demonstrated resilience as the week progressed, showcasing the index's capacity to rebound from initial setbacks.

Looking at the five-day moving average reveals a dynamic trajectory for the FTSE 100. With a peak at 7,530 last Wednesday, the index showcased its inherent capacity for fluctuation. What distinguishes the FTSE 100's volatility is its composition-comprising long-established global corporations rather than the tech-centric profile of indices like the US NASDAQ. These blue-chip stocks, some over a century old, provide a stable yet responsive foundation for market movements.

In the realm of monetary policy, the Bank of England's stance on interest rates adds another layer of complexity to the market landscape. Despite a notable decline in the annual inflation rate, Governor Andrew Bailey emphasised the need for sustained high interest rates in a recent speech in London. While inflation has receded from the double digits of the previous year, Bailey highlighted the ongoing work required to bring it back to the 2% target, and the FTSE 100 reflects this by having not reached the 8,000 points it once stood at ever since. The governor also cautioned about the potential necessity of interest rate hikes in the coming months, signalling a commitment to navigating economic uncertainties.

The FTSE 100's journey through this volatile week reflects the delicate equilibrium between economic indicators, policy considerations, and market sentiments. As fiscal policy updates loom and inflation dynamics evolve, investors continue to navigate a landscape shaped by both global and domestic factors. The FTSE 100's responsiveness to these influences demonstrates its importance as a measure of the overall condition of UK capital markets.

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Brent Crude Surges to $82.51 Amid OPEC+ Anticipation


Brent crude oil reached $82.51 per barrel by 8:00 am UK time today, reflecting heightened anticipation ahead of the upcoming OPEC+ meeting scheduled for November 26.

From the end of the last week, oil prices have exhibited a gradual upward trend as market participants brace for potential decisions from the OPEC+ alliance. Speculation is rife regarding the course of action OPEC+ may adopt, with indications pointing toward a potential extension of supply cuts into early 2024. Both Saudi Arabia and Russia, major players in the oil market, are reportedly leaning towards maintaining their voluntary reduction in supply.

While the anticipation centres around these key players, there is also speculation that the broader OPEC+ coalition may collectively consider further supply cuts. Should this materialise, coupled with the extension of voluntary cuts by Saudi Arabia and Russia, it could effectively eradicate the surplus expected in the first quarter of 2024.


The speculative nature of these discussions has fueled a gradual uptick in the value of Brent crude oil. At the beginning of the week, prices hovered just above $81 per barrel, marking an increase of over $1.50 in the past two days.

The current incremental rise in prices sets the stage for potential further increases should OPEC+ countries officially announce supply cuts during the upcoming meeting. The pre-meeting speculation could transform into official policy decisions, potentially propelling prices even higher.

The oil market has experienced notable volatility over the past week. On November 16, prices for contracts with a January expiry dipped as low as $77.02, marking a significant fluctuation. This movement of over $5 per barrel in six days is particularly noteworthy, especially in the context of a market that has adapted to changes such as the shift to settling in rubles for European customers of Russian oil companies, which unfolded over a year ago.

This current surge stands in stark contrast to the market dynamics in April this year when prices soared to $132 per barrel, underscoring the multifaceted nature of the oil market and its responsiveness to geopolitical and policy-driven factors.

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USD/CAD Analysis: the Rate Approaching Important Support


Bank of Canada Governor Tiff Macklem said yesterday that enough may have been done to curb inflation. As follows from his words, current policies can lead to inflation returning to the target of 2%.

The announcement fueled market and economist expectations that interest rates had peaked. It is acceptable to assume that the Bank of Canada instilled confidence in market participants, and therefore the Canadian dollar strengthened yesterday relative to other currencies.

Including relative to USD. Yesterday, by the way, data on the number of unemployment applications was published. They did not bring any surprises - the labour market continues to remain strong in the US (the actual number of applications was = 209k for the week, expected = 226k, a week ago = 233k). The news gave a reason to strengthen the USD, but overall the US dollar index is in a downward trend amid expectations of easing Fed policy.


Meanwhile, the USD/CAD chart shows that the strengthening Canadian dollar has pushed the rate closer to an important support zone; it is formed by:
-> the lower line of the ascending channel (shown in blue), in which the rate has been since August;
-> as well as the support area (shown in purple) around the level of 1.364.

At the same time, the Stoch RSI indicator dropped into the oversold zone. From the point of view of technical analysis, the chart shows the prerequisites for the formation of a rebound. If it is strong enough, the price will be able to reach the resistance of 1.375.

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Market Analysis: Gold Price Dips From $2K While Crude Oil Price Recovers


Gold price surged toward the $2,000 zone before the bears appeared. Crude oil price is attempting a recovery wave above the $75.00 zone.

Important Takeaways for Gold and Oil Prices Analysis Today

• Gold price started a steady increase from the $1,965 zone against the US Dollar.
  
  
• A key bearish trend line is forming with resistance at $1,995 on the hourly chart of gold at FXOpen.
  
  
• Crude oil prices started a decent recovery wave from the $73.80 support.
  
  
• There is a connecting bearish trend line forming with resistance near $77.00 on the hourly chart of XTI/USD at FXOpen.
  

Gold Price Technical Analysis

On the hourly chart of Gold at FXOpen, the price found support near the $1,965 zone. The price remained in a bullish zone and started a strong increase above $1,985.

There was a decent move above the 50-hour simple moving average. The bulls pushed the price above the $1,985 and $1,995 resistance levels. Finally, the price tested the $2,005 zone before the bears appeared.



There was a minor downside correction below $2,000 and the RSI dipped below 50. There was a move below the 23.6% Fib retracement level of the upward move from the $1,965 swing low to the $2,007 high.

Initial support on the downside is near the 50% Fib retracement level of the upward move from the $1,965 swing low to the $2,007 high at $1,985. The first major support is near the $1,975 zone.

If there is a downside break below the $1,975 support, the price might decline further. In the stated case, the price might drop toward the $1,965 support.

Immediate resistance is near a key bearish trend line at $1,995 and the 50-hour simple moving average. The next major resistance is near the $2,005 level. An upside break above the $2,005 resistance could send Gold price toward $2,020. Any more gains may perhaps set the pace for an increase toward the $2,032 level.

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Market Analysis: GBP/USD Rallies While EUR/GBP Slides Below Support


GBP/USD is gaining pace above the 1.2575 resistance. EUR/GBP declined heavily below the 0.8720 and 0.8695 support levels.


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

• The British Pound is attempting a fresh increase above 1.2600.
  
  
• There is a key bullish trend line forming with support near 1.2575 on the hourly chart of GBP/USD at FXOpen.
  
  
• EUR/GBP is trading in a bearish zone below the 0.8720 pivot level.
  
  
• There is a major bearish trend line forming with resistance near 0.8695 on the hourly chart at FXOpen.
  

GBP/USD Technical Analysis


On the hourly chart of GBP/USD at FXOpen, the pair remained well-bid above the 1.2450 level. As mentioned in the previous analysis, the British Pound started a decent increase above the 1.2500 zone against the US Dollar.

The bulls were able to push the pair above the 50-hour simple moving average and 1.2530. The pair even climbed above 1.2575 and traded as high as 1.2615. It is now consolidating gains above the 23.6% Fib retracement level of the upward move from the 1.2449 swing low to the 1.2615 high.



On the upside, the GBP/USD chart indicates that the pair is facing resistance near 1.2615. The next major resistance is near 1.2640.

A close above the 1.2640 resistance zone could open the doors for a move toward 1.2700. Any more gains might send GBP/USD toward 1.2740.

On the downside, there is a key support forming near a bullish trend line at 1.2575. If there is a downside break below 1.2575, the pair could accelerate lower. The next major support is near the 50% Fib retracement level of the upward move from the 1.2449 swing low to the 1.2615 high at 1.2530.

The next key support is seen near 1.2510, below which the pair could test 1.2450. Any more losses could lead the pair toward the 1.2370 support.

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Market Analysis: Natural Gas Prices Fall to More than 2-month Lows


Yesterday, XNG/USD quotes dropped below the 2,900 level for the first time since mid-September. This was helped by the fact that the NatGasWeather weather forecasting model late last week showed a cooling trend in December in the US, but this was replaced by warming over the weekend.

According to analyst forecasts from Analysts Tudor, Pickering, Holt & Co., published on Monday:
-> natural gas reserves at the end of winter could be 2 trillion cubic feet (previously forecast 1.9 trillion);
-> price could be USD 2.75 (previous forecast was USD 3 or less).



Meanwhile, the US Natural Gas price chart shows that:
-> the price of natural gas is near the lower border of the channel (shown in blue), which can provide support;
-> the MACD indicator indicates divergence (a sign of weakening selling pressure).

Thus, although the market has been in a bearish trend since the beginning of November (shown in red), the chart shows bullish signs - it is possible that the price in the short term may rise to the upper limit of the red channel. The likelihood of this scenario will increase if the weather forecasting model indicates a cold snap.

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