Daily Market Analysis By FXOpen

Commercial Content Analysts
1341

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.

1342

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?

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

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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.

1344

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

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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.

1345

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.

1346

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%.

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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.