Daily Market Analysis By FXOpen

[FXOpen Trader]

USD/CAD Retracts from Nearly 2-Month High


Yesterday, the USD/CAD exchange rate climbed above 1.3785 for the first time since mid-April.

However, today's USD/CAD chart shows that it failed to consolidate at this peak and has dropped to a weekly low.

These fluctuations might be interpreted as traders positioning themselves ahead of today's critical events. According to ForexFactory:

At 15:30 GMT+3, US inflation data will be released;
At 21:00 GMT+3, the Fed's interest rate decision will be announced;
At 21:30 GMT+3, Powell's press conference will take place.



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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.

[FXOpen Trader]

Inflation Data and Fed Verdict Could Set Dollar's Summer Trend


The US currency is gearing up for the most important trading session of the current week, and possibly even the month. Today, the US Consumer Price Index (CPI) data for May will be released. Additionally, the Federal Reserve (Fed) has a meeting scheduled today where the base interest rate will be announced, along with the regulator's dot plot forecast for the rest of the year. Considering that last Friday's employment data exceeded forecasts, many investors and experts (according to an FT-Chicago Booth survey) believe that:

• The Fed will reduce rates by only a quarter of a percentage point this year;
• Instead of three cuts, economists and traders are pricing in up to two rate cuts by the end of the year.

Naturally, such hawkish market expectations are likely to support the strengthening of the US currency. However, it should be noted that the dollar is currently at medium- and long-term highs, and the likelihood of a pullback and the formation of reversal patterns is quite high.

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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

[FXOpen Trader]

Dollar Falls After Inflation Data: Is a Change in Medium-Term Trends on the Horizon?


The second consecutive decline in the US core consumer price index caused a sharp drop in the American currency across the board. For instance, the GBP/USD pair rose by 120 points within a couple of hours, attempting to strengthen above 1.2800. The EUR/USD pair closed Monday's “price gap” and tested 1.0850, while the USD/JPY pair briefly traded below 156.00. However, a change in medium-term trends remains highly uncertain. The Fed meeting and the publication of an updated economic forecast by the US regulator allowed the dollar to quickly recover some losses.

From yesterday's Fed statement:

• The target range for the federal funds rate remains at 5.25–5.50%;
• The median forecast by FOMC members suggests one and a half rate cuts for the federal funds rate (compared to three in the March forecast).

From the published data, it can be inferred that the Fed maintains a fairly hawkish stance, which could support buyers of the US currency.

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]

S&P 500 Index Hits Record After Major News


Yesterday, significant news regarding US inflation was released. According to ForexFactory:
→ Year-on-year Consumer Price Index (CPI): actual = 3.3%, forecast = 3.4%, previous = 3.4%;
→ Month-on-month CPI: actual = 0.0%, forecast = 0.1%, previous = 0.3%;
→ Month-on-month Core CPI (excluding food and energy): actual = 0.2%, forecast = 0.3%, previous = 0.3%.

These official figures indicate that US inflation is slowing down.

This bolstered expectations that the current tight monetary policy might ease. Consequently:
→ the dollar weakened (as we anticipated yesterday while analysing the USD/CAD chart);
→ stock markets surged. Notably, the S&P 500 index (US SPX 500 mini on FXOpen) surpassed 5,444, rising approximately 1.1% within two hours following the inflation news release.

Later that day, the Fed's rate decision and Powell's press conference took place:
→ the Fed rate remained unchanged at 5.5% (as expected);
→ Jerome Powell signalled a possible rate cut before the end of the year, hinting at the possibility of two cuts.



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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.

[FXOpen Trader]

Market Analysis: GBP/USD and EUR/GBP Poised For More Losses


GBP/USD failed to climb above 1.2860 and trimmed all gains. EUR/GBP is declining and trading below the 0.8410 support level.

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

• The British Pound is showing bearish signs below 1.2800.
• There is a key bearish trend line forming with resistance near 1.2765 on the hourly chart of GBP/USD at FXOpen.
• EUR/GBP is declining and showing bearish signs below 0.8460.
• There is a major declining channel forming with support at 0.8410 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 1.2860 zone. As mentioned in the previous analysis, the British Pound struggled to extend gains and declined below the 1.2800 support level against the US Dollar.

There was a clear move below the 61.8% Fib retracement level of the upward move from the 1.2706 swing low to the 1.2860 high. The pair even settled below the 1.2765 level and the 50-hour simple moving average.

The pair tested the 1.2740 support zone and the 76.4% Fib retracement level of the upward move from the 1.2706 swing low to the 1.2860 high.

It is now consolidating losses above the 1.2740 level. On the upside, the GBP/USD chart indicates that the pair is facing resistance near 1.2765 and a connecting bearish trend line. The next major resistance is near the 50-hour simple moving average at 1.2780.

A close above the 1.2780 resistance zone could open the doors for a move toward 1.2825. Any more gains might send it toward 1.2860. If not, the pair could resume its decline below 1.2740. On the downside, there is a key support forming near 1.2710.

If there is a downside break below the 1.2710 support, the pair could accelerate lower. The next major support is near the 1.2690 zone, below which the pair could test 1.2650. Any more losses could lead the pair toward the 1.2550 support.

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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.

[FXOpen Trader]

NZD/USD Exchange Rate Falls from Nearly 5-Month High


The NZD/USD exchange rate has dropped from its highest level in nearly five months. On Wednesday, following the release of US inflation data, the NZD/USD rate exceeded 0.6220 for the first time since 15 January 2024.

However, today the rate has fallen approximately 1.3% from Friday’s peak, suggesting that the market's reaction to the US inflation news was overly emotional.

According to Reuters:
→ Fed Chair Jerome Powell indicated a readiness to keep rates steady until clearer economic signals suggest a need for cuts.
→ Traders have reduced the likelihood of a Fed rate cut at the September meeting.

Meanwhile, the Reserve Bank of New Zealand does not plan to cut rates at all in 2024. According to Trading Economics, any rate cuts are unlikely before mid-2025.

Thus, the policies of the two central banks are balanced, and the current drop from nearly a 5-month high may be a return to a more balanced valuation after an emotional surge into overbought territory.

The RSI indicator supports this view.



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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.

[FXOpen Trader]

European Stock Indices Decline Amid Political Uncertainty


Today, the Eurostoxx 50 index (Europe 50 on FXOpen) has dropped below the early May minimum, reflecting escalating market concerns over the upcoming French elections, as reported by Reuters. Finance Minister Bruno Le Maire's acknowledgment that the current political crisis could evolve into a financial crisis has amplified fears, extending the political risk until June.

How long might this decline persist?

Fundamentally, statements from authorities could calm the markets.



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]

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• S&P 500 Index Hits Record after Major News
• Dollar Falls after Inflation Data: is a Change in Medium-Term Trends on the Horizon?
• FTSE 100 Index Declines after Labour Market News
• Gold Price Drops after US Employment Report

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

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[FXOpen Trader]

Nikkei Index Falls Below 38,000 Points This Month for First Time


According to today's Nikkei 225 (Japan 225 on FXOpen) chart, the index quote dropped below 38,000 points at Monday's low, followed by a recovery (shown by an arrow).

One of the drivers of the decline was the automotive sector, whose shares led during the downturn. In particular, according to Reuters, Toyota Motors' shares fell by more than 2% as the company faces difficulties due to a certification scandal. Japanese national broadcaster NHK reported that Toyota will extend the production halt for some models until the end of July.

The fact that the Nikkei 225 (Japan 225 on FXOpen) price is recovering after dropping below the 38,000 mark suggests a false bearish breakout below this psychological 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.

[FXOpen Trader]

Adobe's Stock Surges Approximately 15% After Report Publication


On June 5th in the article "Is ADBE Stock Undervalued?", we highlighted several bullish signs, suggesting that the report published on June 13th could be a driver for a resumption of the uptrend.

Adobe's report released on June 13th proved to be strong:
→ Earnings per share: Actual = $4.48, Forecast = $4.39;
→ Revenue: Actual = $5.309 billion, Forecast = $5.291 billion. A 10% increase compared to the same quarter last year.

Furthermore, the company stated that:
→ AI is more of an advantage than a hindrance to business development;
→ “We’re seeing early success monetizing new AI technologies across our Digital Media and Digital Experience businesses,” said Shantanu Narayen, Adobe's CEO.



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]

Nasdaq 100 Index Reaches 20,000 Points for the First Time


On 30 May, we noted some uncertainty in the price behaviour of the Nasdaq 100 (US Tech 100 mini on FXOpen) near the resistance level of 18,840, as shown by arrow #1.

Following this, the price declined and tested the former resistance at 18,250 (indicated by arrow #2) – the long lower shadow on the candle indicated aggressive demand (more details in the article on the Hammer pattern).

This test gave the bulls confidence to break through the 18,840 resistance.

In June, the price continued to rally within the ascending channel (shown in green), which is part of a larger ascending channel (shown in blue), driven by:
→ prospects for AI implementation;
→ prospects of Fed rate cuts.

Yesterday, the Nasdaq 100 (US Tech 100 mini on FXOpen) rose by approximately 1.2%, reaching the psychological level of 20,000 points. This record was supported by influential analysts raising their forecasts for US stock markets. For example:
→ Goldman Sachs raised the year-end 2024 target for the S&P 500 (US SPX 500 mini on FXOpen) from 5200 to 5600;
→ Evercore ISI increased its forecast for the same index from 4750 to 6000.

Market sentiment was also buoyed by the anticipation of several comments from FOMC members scheduled for this week. These might confirm the Fed's intention to cut rates as early as September this year.



TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

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

[FXOpen Trader]

European Currencies Adjust to Support Levels: Is Growth Possible?


A week rich in macroeconomic data contributed to the decline of the euro, yen, and pound. Notably, the following events were significant:

• Inflation falling for the second consecutive month (0.2% against the expected 0.3%);
• The publication of the updated forecast from the Federal Reserve (one reduction in the federal funds rate by 0.25%, presumably in September).

Nonetheless, despite the hawkish stance of the Federal Reserve and the steady slowdown in inflation, European currencies managed to stay above key levels relative to the dollar, even laying the groundwork for forming reversal patterns.

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]

TSLA Shares Revive After Shareholder Meeting


Last week, Tesla held a shareholder meeting where the main events included:
→ Shareholders approving Elon Musk’s $56 billion compensation package in TSLA stock options;
→ Relocating the company’s legal headquarters to Texas;
→ Elon Musk’s statements on robotics, asserting that Optimus robots could make Tesla a $25 trillion company.

Approving the massive compensation eliminated the risk of Musk leaving the company (which would likely have caused a sharp drop in TSLA stock price). The billionaire thanked shareholders and today, 18 June, posted on X (Twitter) announcing that he is working on a new master plan for Tesla’s development, likely focusing on the prospects of Optimus robots.

Additionally, news emerged about the launch of Tesla Model 3 sales at a new price in China. This spurred activity in the TSLA stock market.



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]

Market Analysis: AUD/USD and NZD/USD Sight Steady Increase


AUD/USD is attempting a recovery wave from 0.6590. NZD/USD could gain bullish momentum if there is a clear move above the 0.6150 resistance.

Important Takeaways for AUD/USD and NZD/USD Analysis Today

• The Aussie Dollar found support near 0.6590 and is now recovering against the US Dollar.
• There was a break above a key bearish trend line with resistance at 0.6630 on the hourly chart of AUD/USD at FXOpen.
• NZD/USD is attempting a recovery wave above the 0.6110 resistance.
• There is a major bearish trend line forming with resistance near 0.6150 on the hourly chart of NZD/USD at FXOpen.

AUD/USD Technical Analysis
On the hourly chart of AUD/USD at FXOpen, the pair dipped from the 0.6700 resistance zone. The Aussie Dollar declined below 0.6660, but the bulls were active near 0.6600 against the US Dollar.

A low was formed near 0.6590 and the pair is now correcting losses. There was a move above the 50% Fib retracement level of the downward move from the 0.6704 swing high to the 0.6585 low. There was also a break above a key bearish trend line with resistance at 0.6630.



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]

Nvidia Becomes World's Most Valuable Company


According to the NVDA chart today, the share price rose yesterday to a new all-time high, surpassing $135 (after a 10-to-1 split). This pushed Nvidia's market capitalisation to $3.34 trillion, overtaking Microsoft, which is currently valued at $3.32 trillion.

As CNBC reports:
→ Nvidia shares have risen by more than 170% this year, with a strong driver being the first-quarter earnings report released in May.
→ Since the end of 2022, the shares have increased more than ninefold, driven by the emergence of generative artificial intelligence.
→ Nvidia holds around 80% of the AI chip market used in data centres, with this business expanding thanks to purchases by OpenAI, Microsoft, Alphabet, Amazon, and Meta.

What are the prospects for NVDA's share price? Will the company be able to maintain its status as the most valuable company, a title that has traditionally belonged to either Apple or Microsoft?



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.