Daily Market Analysis By FXOpen

[FXOpenTeam]

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.

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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.

[FXOpenTeam]

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.

[FXOpenTeam]

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.

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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.

[FXOpenTeam]

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.

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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.

[FXOpenTeam]

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.

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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.

[FXOpenTeam]

NIO Stock Price Surges by 14%

On 23 August, while analysing the chart of Chinese automaker NIO, we noted that:

→ For months, the price has been forming a downward channel (shown in red), driven by the company’s inability to turn a profit, with the $4.25 level acting as resistance.

→ Investors may hold out for positive shifts in the fundamentals, as for the first time in the company’s history, monthly vehicle deliveries have remained above 20,000.

Indeed, the company’s second-quarter report released yesterday brought pleasant surprises, including reduced losses, a 98.9% year-on-year revenue increase, and improved gross profit margins.

Experts are revising their forecasts, with Deutsche Bank analysts raising their target price for NIO shares, anticipating that the company will sell over 60,000 vehicles in the third quarter.

The market reacted with a sharp price increase – NIO stock surged by 14%.

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.

[FXOpenTeam]

EUR/GBP Exchange Rate Hits 29-Month Low

According to today’s daily chart of EUR/GBP:

→ The rate is around £0.832 per euro – the lowest since April 2022.

→ The RSI indicator has dropped into oversold territory.

Yesterday, the EUR/GBP rate fell by 0.71%, driven by bearish sentiment following the release of PMI indices, which indicated a slowdown in the Eurozone economy.

According to Forex Factory:

French Flash Manufacturing PMI: actual = 44.0, expected = 44.3, previous = 43.9;

French Flash Services PMI: actual = 48.3, expected = 53.0, previous = 55.0;

German Flash Manufacturing PMI: actual = 40.3, expected = 42.4, previous = 42.4;

German Flash Services PMI: actual = 50.6, expected = 51.1, previous = 51.2.

Meanwhile, PMI indices for the UK remain above 50, signalling economic growth.

Flash Manufacturing PMI: actual = 51.5, expected = 52.3, previous = 52.5;

Flash Services PMI: actual = 52.8, expected = 53.5, previous = 53.7.

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.

[FXOpenTeam]

The Price of Gold Continues to Hit Record Highs

As shown by today’s XAU/USD chart, the price of an ounce of gold is around $2,628, marking a new all-time high for three consecutive trading days: 20th, 23rd, and 24th September.

The bullish sentiment in the gold market is driven by:
→ the reaction to Wednesday’s decision by the Federal Reserve to cut interest rates by 50 basis points;
→ another surge in tensions in the Middle East.

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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.

[FXOpenTeam]

A Dark Cloud Cover Candlestick Pattern: Meaning and Application

The dark cloud cover is a two-candlestick pattern that suggests a potential reversal from an uptrend to a downtrend. It may benefit traders and technical analysts seeking to identify selling opportunities. In this article, we will discuss how to spot the setup on a price chart and interpret its signals.

What Is a Dark Cloud Cover?

The dark cloud cover is a two-candlestick bearish pattern that signals a potential reversal in an uptrend. How to identify dark cloud cover? To recognise the pattern, traders look for specific characteristics that distinguish this formation on a chart.

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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.

[FXOpenTeam]

How Does a Carry Trade Work?

A carry trade is a popular forex trading strategy that takes advantage of interest rate differentials between two currencies, aiming to earn returns from the interest gap. This article explores what a carry trade is, its formula, and how the strategy works, helping traders understand its potential advantages and risks.

Carry Trade: Definition

A carry trade is a popular forex strategy where traders take advantage of the difference in interest rates between two currencies. It involves borrowing money in a currency with a low borrowing cost—this is known as the “funding currency”—and then converting that borrowed amount into another offering higher interest, called the “investment currency.” This is done to earn the interest rate differential between the two.

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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.

[FXOpenTeam]

The Dollar Continues to Decline Ahead of US GDP Data

The Fed’s rate cut and a series of weak macroeconomic data from the US have contributed to the resumption of the downward trend for the USD in major currency pairs. For instance, EUR/USD buyers are pushing the price towards the key level of 1.1200, GBP/USD has consolidated above 1.3400, and USD/CAD has hit new year-to-date lows at 1.3440. However, in the upcoming trading sessions, important macroeconomic data are expected, which could either strengthen the current trend or lead to a corrective reversal.

USD/CAD

Weak consumer confidence data from the US for September, along with the economic stimulus measures announced by China’s central bank, have boosted demand for commodity currencies. Both the Canadian and Australian dollars have strengthened to strategic levels, the breach of which could shift medium-term trends.

Technical analysis of the USD/CAD pair suggests the potential for further declines towards the 1.3360-1.3300 range, as several reversal patterns signalling selling pressure have formed on higher timeframes. The bearish scenario could be invalidated if the price confidently consolidates above 1.3500-1.3480.

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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.

[FXOpenTeam]

Analysis of NZD/USD: Exchange Rate Hits Yearly High Today

According to the NZD/USD chart, the exchange rate has reached 0.635 New Zealand dollars per US dollar today, its highest level since December 2023.

As reported by Trading Economics:

→ On one hand, the “kiwi” strengthened due to China’s announcement of an economic stimulus package, as China is New Zealand’s largest trading partner.

→ On the other hand, weaker-than-expected US consumer confidence data (CB Consumer Confidence) released yesterday also supported the pair: actual = 98.7, forecast = 103.9, previous = 105.6.

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.

[FXOpenTeam]

Meta Platforms (META) Stock Price Holds Near All-Time High

As shown on the Meta Platforms (META) stock chart, the price remains around the $560 level, less than 2% away from the all-time high of over $570, reached on 23 September.

A significant gain of approximately 3.80% in one day was achieved on 19 September, driven by increased demand for shares following the Federal Reserve’s decision to ease monetary policy.

Technical analysis of the META stock chart indicates that:
→ The price is forming an upward channel (constructed using the linear regression method, marked in blue), currently sitting in the upper half of this channel.
→ Prior to breaking through key resistance at $540, the price trajectory formed a bullish “inverse cup with handle” pattern, which aligns with another bullish pattern – an “inverse head and shoulders.”
→ The bullish gap that appeared on 19 September could act as a key support zone, helping the price stay above the former resistance at $540.

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.

[FXOpenTeam]

Why Would Countries Devalue Their Currency?

Currency devaluation is a nuanced aspect of fiscal policy with profound implications globally. This article demystifies the strategic reasons and consequential effects when nations choose to devalue their currency. From influencing trade balances to adjusting economic strategies, understanding these dynamics is crucial for traders and investors alike. Dive into the complex world of currency devaluation and its far-reaching impact on global economics.

Devalued Currency Definition

So, what is currency devaluation, and how does a country devalue its currency? Currency devaluation is a deliberate downward adjustment of a country’s currency value relative to another currency, group of currencies, or standard. This monetary policy decision is typically made by a national government or its central bank. Devaluation is distinct from depreciation, which is a market-driven decrease in currency value.

In a practical sense, devaluation reduces the cost of a country’s exports and increases the cost of imports. For countries with fixed or semi-fixed exchange rates, this involves officially lowering the exchange rate by the revaluation of the peg or a change in the pegged currency.

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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.

[FXOpenTeam]

Franc and Euro Adjust in Anticipation of Key Events

The end of the current trading week could bring quite a few surprises for market participants. Many important fundamental events are scheduled for the upcoming trading sessions:

• Today at 11:00 (GMT +3:00) the press conference of the Swiss National Bank
• Today at 12:15 (GMT +3:00) a speech by Elizabeth McCaul, a member of the Supervisory Board (ECB representative)
• Today at 15:30 (GMT +3:00) the publication of US GDP
• Today at 16:20 (GMT +3:00) a speech by US Federal Reserve Chairman Jerome Powell

Depending on the incoming data and comments from officials, the main currency pairs could either continue their current trends or correct towards recent impulses.

USD/CHF

According to the technical analysis of the USD/CHF pair, the price is in a sideways movement in the range of 0.8540–0.8400. The pair has been trading within this channel for about four weeks, and a breakout above the upper boundary of this range could lead to a renewed rise towards 0.8760–0.8640. Should the price decline, last year’s lows around 0.8360 could be revisited.

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.

[FXOpenTeam]

Shares of Chinese Companies Surge

As evidenced by today’s Hang Seng chart (Hong Kong 50 on FXOpen), this stock index has risen to a yearly high.

Bullish sentiment in the market is bolstered by promises from China’s top leadership, including President Xi Jinping, to achieve the growth target for 2024 and to halt the decline in the real estate market.

Bloomberg News reported that China is considering injecting up to 1 trillion yuan of capital into its largest state lenders to enhance their capacity to support the recovery of the Chinese economy. This proposal is part of broader stimulus measures launched by the People’s Bank of China earlier this week.

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.

[FXOpenTeam]

Natural Gas Price Hits 3-Month High

According to today’s XNG/USD chart, the price of natural gas:

→ has risen by approximately 30% since the beginning of September;

→ is currently around the 2.95 level – the last time the price was at this level was at the end of June this year.

Bullish sentiment is supported by:

→ forecasts of a warmer autumn, which is increasing demand for natural gas to power air conditioning systems;

→ concerns related to Hurricane Helen in the US Gulf of Mexico. According to the EIA, 5% of total US dry natural gas production comes from the Gulf of Mexico, and 51% of the total capacity of US natural gas processing plants is located along the US Gulf Coast.

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.

[FXOpenTeam]

What is a Divergence in Trading? 3 Trading Strategies Explained

Divergence trading is a cornerstone concept in the realm of technical analysis. By comparing the direction of asset prices with the direction of momentum indicators, traders can notice subtle changes in market dynamics.

In this video, we’ll dive into the concept of divergence in trading, explaining how it can help identify potential trend reversals or continuations. We’ll cover the most popular indicators that form divergences with the price, offering a detailed breakdown of each type.

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 #divergencetrading #tradingstrategy

[FXOpenTeam]

Best Parabolic SAR Indicator Settings

Parabolic SAR is a key component of technical trading, or technical analysis, which involves assessing financial markets and guiding trading decisions through analysing historical price and volume data, along with utilising diverse technical indicators and chart patterns. This article aims to explore the significance of the Parabolic SAR indicator, finding out which settings make it an effective tool for market analysis.

What Is the Parabolic SAR Indicator?

The Parabolic SAR (Stop and Reverse), or simply PSAR, is a technical analysis indicator designed by J. Welles Wilder to assist traders in identifying potential trend reversals in financial markets. Calculated based on an acceleration factor and an initial SAR value, the indicator trails the price movement, moving towards the trend.

When the Parabolic SAR crosses the price, it signifies a potential trend reversal, serving as a signal for traders to buy or sell depending on the crossover direction. Widely used to identify trend direction and adjust to market volatility, it is often employed in conjunction with other technical tools to make more informed trading decisions, although traders should be cautious and consider risk management strategies. Also, traders widely use the indicator as a trailing stop mechanism.

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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.

[FXOpenTeam]

Market Analysis: Gold Price Sets New High While Oil Price Dips Further

Gold price rallied further and traded to a new high above $2,680. Crude oil is showing bearish signs and might decline below $66.80.

Important Takeaways for Gold and Oil Prices Analysis Today

• Gold price started a steady increase from the $2,545 zone against the US Dollar.
• A key bullish trend line is forming with support near $2,665 on the hourly chart of gold at FXOpen.
• Crude oil prices failed to clear the $72.20 region and started a fresh decline.
• There is a connecting bearish trend line forming with resistance at $68.10 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 $2,545 zone. The price remained in a bullish zone and started a strong increase above $2,600.

There was a decent move above the 50-hour simple moving average and $2,620. The bulls pushed the price above the $2,635 and $2,650 resistance levels. Finally, the price climbed to a new all-time high near the $2,685 level.

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.