The S&P 500 Index Approaches Historic High
On 2 August, we analysed the S&P 500 (US SPX 500 mini on FXOpen) chart, where we:
→ Constructed an ascending channel A-B with a median line shown as a dotted line;
→ Highlighted the risk of a bearish breakout (as indicated by the red arrow).
Since then:
→ The price dropped by more than 5% to the 5 August low, doubling the width of the A-B channel towards point C – the B line became the median of a wider channel. The index’s decline was driven by recession fears, based on weak US labour market data;
→ However, the price then began to recover from the lower boundary of the wider channel, indicating that recession fears have subsided and the rally continues;
→ The price has now returned close to historical highs.
Yesterday, the minutes from the FOMC meeting on 30-31 July were released, revealing that the vast majority of participants noted that if data continues to align with expectations, it might be appropriate to ease policy at the next meeting.
The S&P 500 (US SPX 500 mini on FXOpen) index remained largely unchanged on this news – this indicates market participants’ belief that interest rates will likely be cut in September, which would stimulate economic growth, company performance, and stock indices.
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.
5 Popular Momentum Indicators
Momentum indicators are technical analysis tools that help traders gauge the force behind price movements. They can show optimal entry and exit points and provide valuable insight into whether a trend is likely to continue or reverse.
Let’s look at the most common momentum signals.
- Overbought and oversold conditions;
- Divergences;
- Crossovers.
Now let’s break down five of the most popular indicators.
- The Average Directional Index, or ADX, is used to determine a trend’s strength.
- The Commodity Channel Index, or CCI, is a versatile momentum indicator that measures an asset’s price deviation from its average price relative to its mean deviation. The indicator can also be used to identify divergences.
- The Relative Strength Index, or RSI, is an oscillator that measures the speed and change of price movements. Traders can look for divergence between the RSI and price to identify weakening trends and possible reversals.
- The Moving Average Convergence Divergence, or MACD, is a highly regarded trend-following momentum indicator. Traders use crossovers between the MACD and signal lines as potential entry and exit signals.
- The Momentum indicator measures the rate of change in an asset’s price over a specific period. The Momentum is especially useful for identifying divergences.
FXOpen YouTube
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.
#indicatorstrading #adx #rsi #macd #cci
What Is the ICT Silver Bullet Strategy, and How Does It Work?
The ICT Silver Bullet strategy offers traders a unique approach to capitalising on market opportunities during specific trading hours. This article explored this advanced strategy, explaining the role of fair value gaps, liquidity, and timeframes and how to implement it.
Understanding the ICT Silver Bullet Strategy
The ICT Silver Bullet trading strategy is a sophisticated trading methodology developed by Michael J. Huddleston, known as the Inner Circle Trader, or ICT. This strategy is designed to capitalise on specific, high-probability trading opportunities that align with certain times throughout certain sessions, specifically the London and New York sessions.
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.
Market Analysis: GBP/USD Surges, USD/CAD Drops To Support
GBP/USD started a fresh increase above the 1.2920 zone. USD/CAD declined and now consolidates below the 1.3640 level.
Important Takeaways for GBP/USD and USD/CAD Analysis Today
- The British Pound is eyeing more gains above the 1.3130 resistance.
- There is a connecting bullish trend line forming with support near 1.3100 on the hourly chart of GBP/USD at FXOpen.
- USD/CAD started a fresh decline after it failed to clear the 1.3720 resistance.
- Recently, there was a break above a short-term bearish trend line with resistance at 1.3585 on the hourly chart at FXOpen.
GBP/USD Technical Analysis
On the hourly chart of GBP/USD at FXOpen, the pair formed a base above the 1.2880 level. The British Pound started a steady increase above the 1.2920 resistance zone against the US Dollar.
The pair gained strength above the 1.3000 level. The bulls even pushed the pair above the 1.3050 level and the 50-hour simple moving average. The pair tested the 1.3130 zone and is currently consolidating gains.
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.
Analysis of GBP/USD: The Pair Approaches 2023 High
Yesterday, the Purchasing Managers’ Index (PMI) data for both the UK and the US were released.
According to ForexFactory, the UK figures were as follows:
→ Flash Manufacturing PMI: actual = 52.5, forecast = 52.1; previous = 52.1;
→ Flash Services PMI: actual = 53.3, forecast = 52.8; previous = 52.5.
As SPGlobal reports, the August PMI data signalled another significant expansion (the largest since April) in the UK’s private sector output, supported by strong growth in new orders.
In contrast, the US figures were less encouraging:
→ Flash Manufacturing PMI: actual = 48.0, forecast = 49.5; previous = 49.6;
→ Flash Services PMI: actual = 55.2, forecast = 54.0; previous = 55.0.
In response to yesterday’s PMI releases, the GBP/USD rate has been climbing this morning towards the 2023 high around the 1.3140 level. Notably:
→ Since the August low, the pair has risen by over 3.5%;
→ A key driver of bullish sentiment for GBP/USD is the weakness of the US dollar, driven by expectations of a Fed rate cut in September.
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.
NIO Stock Price Tests the 4.2 Level
For many months, the share price of the Chinese automaker NIO has been moving within a downward channel (shown in red), driven by the company’s ongoing struggle to achieve profitability.
From a technical analysis perspective, this week has provided a discouraging signal for investors – the 4.2 level, which acted as support in June and July before being broken in early August, has now been tested:
→ On the 19th, the price rose on a narrow candle (a sign of buyer uncertainty);
→ On the 20th, the price fell on a wide candle (a sign of seller confidence);
→ This suggests that the 4.2 level has likely switched from support to resistance.
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.
Watch FXOpen’s 19 - 23 August Weekly Market Wrap Video
Weekly Market Wrap With Gary Thomson: Gold, Brent Oil, European Currencies, S&P 500
Get the latest scoop on the week’s hottest headlines, 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.
- The S&P 500 Index Approaches Historic High
- European Currencies Strengthened Ahead of the Jackson Hole Symposium
- Brent Oil Price Drops Over 3.5% in Two Days
- Gold Price Surpasses $2500 for the First Time
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
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 #fxopenyoutube #fxopenint #weeklyvideo
What Is the Hanging Man Candlestick Pattern, and How Can You Trade It?
In the world of technical analysis, candlestick patterns play a vital role in helping traders decipher market trends and potential reversals. Among the many setups, the hanging man holds particular significance. This distinctive formation captures traders’ attention as it often serves as a warning sign of a possible trend reversal. This article will go through the technical analysis of the hanging man formation and explain how traders can trade with it.
What Is a Hanging Man Pattern?
The hanging man candlestick pattern is characterised by a small body near the top of the candlestick, a long lower shadow, and little to no upper shadow. It resembles a figure hanging from its head, hence the name “Hanging Man.”
TO VIEW THE FULL ARTICLE, VISIT FXOPEN BLOG
Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
RISK WARNING: Trading on the Forex market involves substantial risks, including complete possible loss of funds and other losses and is not suitable for all members. Clients should make an independent judgement as to whether trading is appropriate for them in the light of their financial condition, investment experience, risk tolerance and other factors.
The EUR/USD Exchange Rate Has Risen to the 1.12 Level
During his speech at Jackson Hole, as reported by Reuters, the Fed Chair unexpectedly focused heavily on the US labour market. Powell stated that weaker employment prospects are unacceptable. As a result of this emphasis, market expectations for a rate cut in September decreased, and the value of the US dollar increased:
→ On Monday morning, the dollar index is recovering from the year’s lows, which were reached on Friday;
→ Accordingly, other currencies are depreciating against the USD.
As shown by the technical analysis of the EUR/USD chart:
→ Since April, the exchange rate fluctuations have been forming an upward channel (marked in blue, with support points indicated by circles);
→ Within this channel, the price is near the upper boundary, from which resistance can be expected;
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.
Brent Crude Oil Bounces Off Key Support
Analysing the oil market on the XBR/USD chart on 20 August, when Brent was trading around $77 per barrel, we:
→ Identified resistance around $81.60;
→ Noted that the price was approaching a key support level (shown by the yellow line), which has been in effect for several months;
→ Speculated that bears might attempt to break the August low.
This attempt by the bears can be seen in the price drop to $75.55 on 22 August.
However, the August low was not breached, as the yellow support line had an impact on the price—Brent crude oil reversed upwards (indicated by an arrow).
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.
How Traders Identify and Trade Bull and Bear Flag Patterns
Flags are crucial tools in technical analysis, offering traders insights into trend continuation. In this article, we’ll explore questions like “What is a bull flag pattern?” and “What does a bear flag look like?” alongside the pattern’s psychology, formal identification, and trading strategies.
What Is a Flag Pattern?
A flag is a continuation chart pattern that signals the potential for an ongoing trend to resume after a brief consolidation. It consists of a sharp price movement, known as the flagpole, followed by a rectangular consolidation phase that slopes against the prevailing trend, forming the flag. The flag is framed by parallel trendlines, acting as support and resistance.
This consolidation represents a temporary pause in the trend as market participants catch their breath before continuing in the trend’s direction. Identifying a flag pattern helps traders anticipate the resumption of the prior trend, providing strategic entry points for trades.
TO VIEW THE FULL ARTICLE, VISIT FXOPEN BLOG
Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
RISK WARNING: Trading on the Forex market involves substantial risks, including complete possible loss of funds and other losses and is not suitable for all members. Clients should make an independent judgement as to whether trading is appropriate for them in the light of their financial condition, investment experience, risk tolerance and other factors.
Broadcom Inc. (AVGO) Shares Drop Over 4%
As shown by the chart, yesterday, shares of Broadcom Inc. (AVGO)—a US technology company ranked in the top 10 by market capitalisation—were among the worst performers in terms of price movement.
This is a warning sign for those investing in semiconductor manufacturers, considering that:
→ Tomorrow, data on Nvidia’s second-quarter performance will be released;
→ Since mid-June, AVGO’s share price has been underperforming the stock index.
A technical analysis of the AVGO chart provides further grounds for concern:
→ In 2024, the price formed an ascending channel (shown in blue), which remains relevant for now, despite a drop below the lower boundary on 5 August.
→ Price action in August indicates (marked by an arrow) that the median line of this channel, reinforced by the psychological level at $170, has now assumed the role of resistance.
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.
XNG/USD: Natural Gas Price Hits 2.5-Week Low
As shown on the XNG/USD chart, today, the price of natural gas fell below $2.16 for the first time since 8 August.
Bearish sentiment is being driven by the fact that: → This is the last week of summer. Gas consumption typically decreases in mid-September as the use of air conditioning declines; → Gas storage levels are abundant. According to Reuters, current stock levels exceed the seasonal average by 12%.
A technical analysis of the XNG/USD chart provides several arguments suggesting that bears hold the upper hand in the market:
→ Price action is forming a descending channel, shown in red. The upper boundary of the channel acted as resistance, with the price forming a bearish rounding reversal pattern (as indicated in blue).
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.
Descending Triangle Pattern: Rules and Signals
A descending triangle is one of the patterns of a triangle group. The descending triangle is one of the most common technical analysis tools that can be spotted on price charts of any asset. Therefore, traders like implementing it in their trading strategies. However, this formation may be challenging. Read on to learn how to distinguish between the descending triangle signals.
What Is a Descending Triangle Pattern?
A descending or falling triangle is a bearish formation that is usually formed in downtrends. Thus, it signals a trend continuation. Although it is believed that a descending triangle pattern can occur in an uptrend, the theory states that it must form during a downtrend to provide strong signals.
TO VIEW THE FULL ARTICLE, VISIT FXOPEN BLOG
Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
RISK WARNING: Trading on the Forex market involves substantial risks, including complete possible loss of funds and other losses and is not suitable for all members. Clients should make an independent judgement as to whether trading is appropriate for them in the light of their financial condition, investment experience, risk tolerance and other factors.
Market Analysis: Gold and Oil Prices Signal More Upsides
Gold price started a fresh increase above the $2,500 resistance level. Crude oil prices climbed higher above $76.00 before the bears appeared.
Important Takeaways for Gold and Oil Prices Analysis Today
- Gold price started a steady increase from the $2,470 zone against the US Dollar.
- A connecting bullish trend line is forming with support near $2,505 on the hourly chart of gold at FXOpen.
- Crude oil prices extended gains above the $76.00 and $77.00 resistance levels.
- There was a break below a key bullish trend line with support at $75.80 on the hourly chart of XTI/USD at FXOpen.
Gold Price Technical Analysis
On the hourly chart of Gold at FXOpen, the price formed a base near the $2,470 zone. The price started a steady increase above the $2,490 and $2,500 resistance levels.
There was a decent move above the 50-hour simple moving average and $2,515. The bulls pushed the price above the $2,320 resistance zone. Finally, the bears appeared near $2,525. A high was formed near $2,526 and the price is now consolidating gains.
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.
Nasdaq 100 Consolidates Ahead of Nvidia Report
Today, after the main trading session ends, Nvidia (NVDA) – the second-largest company by market capitalisation and the leader of 2024 amid the AI boom – will release its second-quarter earnings report.
It’s reasonable to assume that market participants are anticipating this event, which will likely trigger a surge in market volatility:
→ Nvidia shares (NVDA) have been fluctuating within the $123.50 – $131.00 range since 19 August;
→ Signs of anticipation are also evident on the technology index chart.
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.
AUD/USD: Price Faces Resistance After CPI Release
Today, the Australian Bureau of Statistics released the Consumer Price Index (CPI) figures. According to ForexFactory, the actual annual inflation rate was 3.5% (expected = 3.4%, previous = 3.8%). In other words, inflation in Australia is declining, but not at the pace that might have been hoped for.
The initial reaction to the news was a sharp rise in the Australian dollar, with the AUD/USD rate increasing by approximately 0.4% in the first 15 minutes after the release.
However, the price then returned to levels seen before the inflation news was released. How can this be interpreted?
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.
Dollar Downtrend Continues: When Might an Upward Correction Start?
The end of last week was quite unfavourable for the US dollar. Following the Jackson Hole symposium, where Jerome Powell confirmed the Fed’s readiness to start lowering the base interest rate, the dollar sharply declined across the board. The USD/CAD pair dropped below 1.3600, GBP/USD reached new 2023 highs at 1.3140, and EUR/USD buyers managed to test the key resistance at 1.1200. The downward trend has continued into the start of this week. Under what conditions might this downtrend slow down, and at what levels could a rebound be expected?
USD/CAD
Sellers of the USD/CAD pair successfully broke through the key 1.3600-1.3580 range that had been holding the price in the first half of this year. The break of this support could pave the way for further price decline and a test of 1.3400-1.3350. Near these levels, a slowdown in the downward movement could be expected, particularly if the news backdrop is favourable. The beginning of an upward correction could lead to a price return to the 1.3600-1.3500 range. Technical analysis of the USD/CAD pair indicates the potential for further decline, as higher timeframes show a strong downward impulse, with no correction patterns yet forming.
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.
Double Top Pattern: Overview and Trading Rules
A double top is a popular technical analysis pattern that usually appears before a reversal in an uptrend. It’s one of the most common patterns and it can be found on any timeframe of any asset. Still, some traders confuse its signals. In this FXOpen article, we will explore how to spot the double top formation on a price chart and use it to build your own trading strategy.
What Is a Double Top Pattern?
In technical analysis, a double top pattern meaning refers to a chart pattern that consists of two swing highs with a trough in between, and the two highs should be at the same or almost the same level. Some traders confuse a double top with a double bottom formation. Therefore, the question “Is the double top bullish or bearish?” is common. The double top pattern appears at the end of an uptrend, and it’s always bearish. Conversely, the double bottom setup occurs at the end of a downtrend, and it’s always bullish.
TO VIEW THE FULL ARTICLE, VISIT FXOPEN BLOG
Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
RISK WARNING: Trading on the Forex market involves substantial risks, including complete possible loss of funds and other losses and is not suitable for all members. Clients should make an independent judgement as to whether trading is appropriate for them in the light of their financial condition, investment experience, risk tolerance and other factors.
Euro Tests Key Levels Ahead of Inflation Data
EUR/USD
The euro has retreated from its previously reached highs. The 1.12000 level provided strong resistance to buyers, and after testing it twice, the price has corrected to 1.1100. This level has already offered support to the pair last week, so for now, we are seeing range-bound trading between 1.1200-1.1090.
What scenarios could unfold in the upcoming trading sessions?
- If the price breaks and holds below 1.1090, a full-fledged downward correction could develop, with a decline towards 1.1050-1.0980.
- If the price consolidates above 1.1200, the upward momentum could resume, with a rise towards 1.1400-1.1300.
Technical analysis of EUR/USD suggests the potential for a deeper downward retracement, as a “bearish harami” pattern has formed on the daily timeframe.
TO VIEW THE FULL ANALYSIS, 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.
