Daily Market Analysis By FXOpen

[FXOpen Trader]

Nvidia (NVDA) Shares Among the Biggest Losers

On July 31, US labour market data was released, which proved disappointing and contributed to a decline in the Nasdaq 100 index (US Tech 100 mini on FXOpen) by over 10% between August 1 and 5.

This heightens the importance of the upcoming labour market data release, scheduled for tomorrow (15:15-15:30 GMT+3). It seems that concerns are growing among market participants that the news could reveal further negative trends.

This could explain the sell-off that gripped the US stock market yesterday. The Nasdaq 100 index (US Tech 100 mini on FXOpen) dropped by more than 3%, with Nvidia (NVDA) shares losing over 9% of their value.

In the first half of 2024, NVDA was a growth leader, but now it is among the biggest decliners—a bearish signal that suggests the price decline could continue. If so, how significant could it be?

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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

 

[FXOpen Trader]

Brent Crude Oil Price Hits Yearly Low

Analyzing the oil market on the XBR/USD chart from August 26, when Brent crude was trading around $79 per barrel, we observed the following:

→ The price was forming a descending channel (shown in red) and approaching its upper boundary, which could act as resistance.
→ We identified a key support level (shown in yellow).
→ We suggested that the bulls would need to prove their determination when facing a block of resistance around the $80 level.

Since then, Brent crude oil has:

→ Reversed downward, failing to hold above the $80 level, and continued to decline within the red channel.
→ Accelerated its decline, breaking through the key support around the $75 level.

Bearish sentiment was fueled by OPEC+ plans to increase oil production, signaling a shift away from production cuts aimed at maintaining higher prices.

Could Brent Crude Oil Continue to Decline?

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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

 

[FXOpen Trader]

Understanding the Inverse Cup and Handle Chart Pattern

Understanding chart patterns is fundamental for market participants. This article delves into the inverse cup and handle formation, a bearish signal indicating a potential downward movement. Explore its identification, trading strategies, psychological underpinnings, common pitfalls, and more to boost your trading knowledge.

What Is the Inverse Cup and Handle Pattern?

The inverse cup and handle, sometimes called an upside-down cup and handle pattern, is a bearish chart pattern that may appear during up- and downtrends. It is the opposite of the traditional cup and handle pattern, which is bullish. The inverse formation consists of two main parts: the "cup," which is an inverted U-shape, and the "handle," a small upward retracement following the cup.

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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.

 

[FXOpen Trader]

Market Analysis: EUR/USD Eyes Fresh Increase, USD/JPY Trims Gains

EUR/USD started a fresh decline from 1.1200. USD/JPY is correcting gains and might test the 144.15 support in the near term.

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

• The Euro started a fresh decline below the 1.1150 support.
• There is a key bearish trend line forming with resistance at 1.1055 on the hourly chart of EUR/USD at FXOpen.
• USD/JPY struggled near 147.20 and recently started a downside correction.
• There was a break below a major bullish trend line with support at 145.80 on the hourly chart at FXOpen.

EUR/USD Technical Analysis

On the hourly chart of EUR/USD at FXOpen, the pair started a fresh decline from the 1.1200 zone. The Euro declined below the 1.1150 support zone to enter a bearish zone against the US Dollar.

The pair even settled below the 1.1110 zone and the 50-hour simple moving average. A low was formed near 1.1026 and the pair is now correcting losses. It is now approaching the 23.6% Fib retracement level of the recent decline from the 1.1190 swing high to the 1.1026 low.

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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

 

[FXOpen Trader]

The Pound Approaches Recent Highs: What Could Happen Next?

GBP/USD

After a sharp rise at the end of August, the British currency corrected to a key support level around 1.3100. At the start of the week, sterling sellers attempted to push through this support, but so far without success. A false breakout of the 1.3100 level, followed by a rebound, allowed buyers to form a bullish engulfing pattern.

If the 1.3100 level holds, the GBP/USD pair may consolidate around the recent highs in the 1.3240-1.3200 range. A deeper downward correction could occur if the pair breaks below 1.3100. In the coming trading sessions, we might see a surge in volatility as several important macroeconomic reports are expected:

• Today at 11:30 (GMT +3:00) – UK Construction PMI for August;
• Today at 15:15 (GMT +3:00) – US ADP Nonfarm Employment Change;
• Today at 16:45 (GMT +3:00) – US Services PMI.

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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

 

[FXOpen Trader]

Canopy Growth Corp (CGC) Shares Drop Below $5

As the chart indicates, Canopy Growth Corporation (CGC) shares closed below $5 yesterday for the first time since late March 2024.

In the spring, the stock price of the cannabis production and distribution company surged amid expectations that the US Drug Enforcement Administration (DEA) might downgrade marijuana from a Schedule I to a Schedule III substance.

The decision was indeed made on 30 April, which saw CGC’s share price peak above $14, as investors anticipated that the move would: → accelerate the legalisation of marijuana for both medical and recreational use; → reduce penalties for illegal marijuana trade; → boost profits for companies like Canopy Growth Corporation.

However, the reality was different. The Q2 earnings report released on 9 August showed that Canopy Growth Corporation's (CGC) actual performance fell short of analysts' expectations. For instance, gross revenue was $48.3 million (compared to the forecast of $51.2 million and Q1 revenue of $53.7 million).

Despite favourable conditions, including a rising stock market in 2024, Canopy Growth Corporation's (CGC) shares have disappointed.

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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

 

[FXOpen Trader]

Analysis of USD/CAD: Bank of Canada Cuts Interest Rate

Yesterday, the Bank of Canada reduced its key interest rate by 25 basis points to 4.25%. Its governor, Tiff Macklem, cited weak economic growth and suggested that a more substantial rate cut could be considered in the future.

While the rate cut was widely expected, the currency market reacted with a surge in volatility. For instance, on the USD/CAD chart:
→ On 3 September, ahead of the decision, the USD/CAD rate was climbing;
→ On 4 September, immediately after the announcement, the rate dropped sharply.

What could be the outlook for the exchange rate, which has fallen by approximately 3% from early August to the end of the month, breaking key resistance at 1.3600?

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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

 

[FXOpen Trader]

What Is the S&P 500 Index and How to Trade It via CFDs?

The S&P 500 index is a cornerstone of the financial world, providing a snapshot of the US stock market by tracking 500 of the largest companies. This FXOpen article delves into the essence of the S&P 500, its operational mechanics, and how traders can navigate its movements through CFDs.

What Is the S&P 500?

The S&P 500 index, established in 1957, serves as a barometer for the US economic health, tracking the performance of 500 large companies listed on stock exchanges in the United States. It is widely regarded as one of the best representations of the US stock market and a leading indicator of other US equities. The index is managed by Standard & Poor's, a division of S&P Global, and is updated to reflect changes in the market and economy.

Inclusion in the S&P 500 is based on several criteria, including market capitalisation, liquidity, domicile, public float, financial viability, and the length of time publicly traded. Market capitalisation, in particular, is a critical factor, ensuring that the index reflects the largest and most stable companies that meet Standard & Poor's stringent requirements.

The index uses a market capitalisation-weighted formula. In essence, market capitalisation weighting means those with a greater value, like Apple or Microsoft, have an outsized impact on the index’s movements. The calculation involves summing the adjusted market capitalisation of all 500 companies and dividing it by a divisor, a proprietary figure adjusted by Standard & Poor's to account for changes such as stock splits, dividends, and mergers.

TO VIEW THE FULL ARTICLE, VISIT THE 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.

 

[FXOpen Trader]

Market Analysis: GBP/USD Recovers While EUR/GBP Eyes Gains

GBP/USD is attempting a fresh increase from the 1.3090 zone. EUR/GBP is gaining pace and might extend its upward move above the 0.8440 zone.

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

• The British Pound is attempting a recovery above the 1.3130 zone against the US Dollar.
• There was a break above a key bearish trend line with resistance at 1.3120 on the hourly chart of GBP/USD at FXOpen.
• EUR/GBP started a fresh increase above the 0.8420 resistance zone.
• There is a major rising channel forming with support near 0.8425 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 1.3265 zone. The British Pound traded below the 1.3200 zone against the US Dollar.

A low was formed near 1.3090 and the pair is now attempting a recovery wave. There was a break above the 23.6% Fib retracement level of the downward move from the 1.3266 swing high to the 1.3088 low.

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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

 

[FXOpen Trader]

Analysis of XAU/USD: Gold Price Holds Near Key Resistance

As shown on the XAU/USD chart today, the price of gold is:

→ above the psychological level of $2,500 per ounce;

→ near a key resistance marked by a red line labelled Support 2. This line has been preventing further price growth several times since 20 August, when the all-time high was reached.

If the bulls manage to break through this line, it could turn into a support level, as happened with Support 1 (as indicated by arrows). This would set the stage for a potential rally within the upward channel, marked in blue. From a technical analysis perspective, a break above the “bull flag” pattern could signal a resumption of the uptrend.

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.