Daily Market Analysis By FXOpen

[FXOpen Trader]

How to Trade Commodities? Five Popular Strategies

Whether you're a seasoned trader or new to the world of commodities, understanding the various available strategies can play an important role in building an effective trading plan. In this article, we’ll explain five commodity trading strategies that you can get started with today.

Commodity Trading Explained
Commodity trading refers to the buying and selling of raw materials and industrial components in the financial markets. While forex trading deals with currencies, commodities trading primarily deals with physical goods. Typically, commodities fall into four broad categories: energy, metals, agricultural, and environmental.

There are many reasons why people buy and sell commodities. Some trade them as a way of hedging against inflation, particularly precious metals. Others might use them to take advantage of a booming economy, as demand for energy, metal, and food usually increases in times of economic growth.

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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]

Analysis of Amazon (AMZN) Share Price After Disappointing Report

On Thursday, Amazon released its second-quarter report:
→ Earnings per share: actual = $1.26, forecast = $1.03;
→ Gross sales: actual = $147.98 billion, forecast = $148.66 billion.

Amazon’s CFO, Brian Olsavsky, attributed the decline in sales to distractions caused by Trump’s news coverage and the Olympics, suggesting people spent more time reading news and less time shopping on Amazon.

As a result, the sales forecast for the third quarter fell short of expectations, with management estimating between $154 billion and $158.5 billion, while analysts’ average estimate was $158.24 billion.

Investors were disappointed by this news, causing Amazon’s share price to drop approximately 9% on Friday, creating a wide bearish gap. On Monday, the price also opened with a bearish gap and continued to fall, creating a precarious situation.

However, by Monday’s close, the bulls had recovered the early trading losses, and on Tuesday, AMZN showed some stability, staying close to Monday’s closing price.

Does this mean the downward trend (with AMZN’s price now more than 20% below its July all-time high) has run its course?

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]

USD/JPY Analysis: Rate Stabilizes After Tsunami

Less than a month ago, the rate was above 161 yen per US dollar. This week, it dropped below 142.5 yen (approximately -12%).

The strengthening of the Japanese yen was driven by actions from the Bank of Japan and financial authorities:
→ Intervention to support the yen in mid-July;
→ An interest rate hike last week.

On its downward trajectory, the USD/JPY rate broke through:
→ The ascending trendline (shown in purple);
→ The median line of a large ascending channel (shown in blue) that began in 2023;
→ The psychological levels of 160 and 150 yen per dollar.

The bears' aggression seems to have exhausted near the lower boundary of the blue channel. This was aided by statements from authorities aimed at stabilising financial markets, including the Japanese stock market.

Specifically, Bank of Japan Deputy Governor Shinichi Uchida said: “I believe that the bank needs to maintain monetary easing with the current policy interest rate for the time being, with developments in financial and capital markets at home and abroad being extremely volatile.” He also noted that concerns about the US economy, combined with actions from the Bank of Japan, triggered the volatility.

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]

Candlestick Wick Meaning and Trading Strategies

Understanding the subtle cues provided by candle wicks can unlock new dimensions in trading strategy development. These seemingly minor details offer profound insights into market sentiment and price action dynamics. This article delves into the meaning behind candle wicks and explores strategic ways to trade them, equipping traders with the knowledge to potentially enhance their trading performance.

Understanding Candle Wicks

Candle wicks, extending beyond the body of the candlestick, offer a deeper insight into market dynamics than open and close price levels. Their lengths and positions relative to the candle body unveil the tug-of-war between buyers and sellers within a given timeframe.

A long wick candle to the upside suggests that buyers pushed the price higher, but sellers eventually overcame, driving the price down from its peak. Conversely, a lengthy lower wick indicates sellers initially dominated, with buyers making a strong comeback.

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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]

Yen in Correction: Factors for Potential Growth

In August, the Japanese yen became one of the most popular instruments in the forex market. Following an unexpected rate hike by the Bank of Japan and weak labour market data from the US, the USD/JPY pair dropped by more than 1000 pips, settling below the psychological level of 150.00. The divergent monetary policies of the US and Japanese regulators contributed to increased volatility in yen pairs. However, after a speech by the Bank of Japan's Deputy Governor, the yen sharply corrected. Shinichi Uchida stated that "it is necessary to maintain the current level of monetary easing," which the market interpreted as a signal that the yen's rate is unlikely to increase this year.

Currently, the yen is experiencing a corrective pullback. Let's consider the possible developments in the upcoming trading sessions.

USD/JPY

Technical analysis of the USD/JPY pair indicates a potential continuation of the corrective pullback, as a "bullish harami" pattern formed on the daily timeframe two days ago. If the recent high at 147.90 is surpassed, the price may test the important area of 151.00-150.00. A decline below 145.40-145.00 could lead to a resumption of the downward movement towards 142.00-141.00.

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]

Is the Japanese Stock Market Stable Today?

On July 11, the Nikkei 225 index (Japan 225 on FXOpen) started to decline. Notably, on July 15, we observed bearish activity around the 41330 level.

Interestingly, US stock indices also began to fall on July 11. However, the Japanese stock market saw a more dramatic drop, exceeding 25% by the August 5 low.

Has the Japanese stock market continued to fall? No. After a alarming Monday on August 5, the price has been recovering. It closed higher on Tuesday and Wednesday, with bullish signs observed today, Thursday.

Analyzing the Nikkei 225 (Japan 225 on FXOpen) chart on Monday, we noted that:

→ The price dropped to a support block between 30,400 and the psychological level of 30k.

→ A strong bounce from this block could indicate activated demand (a sign of an emotional selling climax in Wyckoff's terminology).

We then suggested that this support block would hold, and the Japanese stock market might enter a consolidation phase to establish a new balance of supply and demand.

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]

Silver Price Finds Support Near 3-Month Low

As shown on the XAG/USD chart, the price of silver is currently around $26.75 this week, marking the lowest level since early May.

In our analysis of silver on June 6, we noted:

→ Silver was underperforming gold—a bearish sign;

→ Other bearish indicators included a double top pattern near the $32 per ounce level.

Since the close on June 6, silver prices have dropped by more than 14%, with:

→ A bearish head-and-shoulders pattern forming above the psychological level of $30 per ounce;

→ The price breaking below the median line of an ascending channel (shown in blue);

→ The price establishing a downward channel (shown in purple), with the $29 level acting as resistance (indicated by an arrow).

One of the drivers of this decline has been recession fears in the U.S. economy, as commodity markets typically experience downward trends during recessions.

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]

Renko Trading Strategies: How To Trade With Renko Charts

Renko charts stand out in the trading world for their unique ability to filter market noise and highlight significant price movements, offering a clearer view of market trends. This FXOpen article delves into the synergy between Renko charts and various trading indicators, unveiling four strategies designed to navigate the complexities of the financial markets.

Understanding Renko Charts

Renko charts, derived from the Japanese word 'renga' meaning 'brick', offer a distinctive approach to charting price movements in the financial markets. Unlike traditional candlestick charts that plot price changes over time, Renko charts focus solely on price movement, disregarding time and volume. This method is known for its simplicity and effectiveness in identifying market trends and reducing noise.

Renko charts consist of Renko bars (or bricks), where each bar represents a fixed price movement. Each new Renko bar is plotted at a 45-degree angle from the previous one to the right. The size of the movement, known as the "box size", is predetermined by the trader.

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]

Eli Lilly Shares Surge Over 9% After Strong Earnings Report

As the chart of Eli Lilly's (LLY) share price shows today, yesterday's trading closed at a level more than 9% higher than Wednesday's closing price. The main driver of this growth was a strong Q2 report:

→ Earnings per share: actual = $3.92, expected = $2.74;
→ Gross sales: actual = $11.3 billion, expected = $9.99 billion.

Market participants reacted positively not only to the fact that the American pharmaceutical company's actual results significantly exceeded forecasts but also to Eli Lilly's rising expectations for the second half of the year, driven by demand for its diabetes treatment Mounjaro and weight loss drug Zepbound.

Technical analysis of the Eli Lilly (LLY) stock chart shows that:
→ The price action is forming an upward channel in 2024 (shown in blue);
→ After a rebound, the median line of this channel was breached (as indicated by the arrow);
→ As could be expected, this line acted as resistance – as indicated by the high of yesterday's candlestick.

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: EUR/USD Dips Again While USD/JPY Aims Fresh Increase

EUR/USD declined from the 1.1000 resistance and corrected gains. USD/JPY is rising and might take out the 147.80 resistance.

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

• The Euro started a fresh decline below the 1.0945 support zone.
• There is a connecting bearish trend line forming with resistance at 1.0920 on the hourly chart of EUR/USD at FXOpen.
• USD/JPY climbed higher above the 144.15 and 145.55 levels.
• There is a connecting bullish trend line forming with support at 147.00 on the hourly chart at FXOpen.

EUR/USD Technical Analysis

On the hourly chart of EUR/USD at FXOpen, the pair struggled to clear the 1.1000 resistance zone. The Euro started a fresh decline and traded below the 1.0980 support zone against the US Dollar.

The pair declined below 1.0945 and tested the 1.0880 zone. A low was formed near 1.0881 and the pair is now consolidating losses. There was a minor recovery wave above the 1.0910 level. The pair surpassed the 23.6% Fib retracement level of the recent decline from the 1.1008 swing high to the 1.0881 low.

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.