Daily Market Analysis By FXOpen

[FXOpen Trader]

Solana Is the Fourth Largest Cryptocurrency by Capitalisation. But for How Long?

2023 turned out to be a good year for cryptocurrencies, especially given the depressing mood that reigned at the end of 2022.

From the beginning of 2023:

• Bitcoin increased in price by more than 150% – including due to rumours related to the approval of applications for a Bitcoin ETF;
• Ethereum rose by approximately 85%.

But what has been particularly impressive is the progress made by the Solana project. This is a decentralised blockchain platform, which is characterised by high speed and scalability — they are achieved through the use of a unique architecture based on the Proof-of-History (PoH) protocol. In 2023, Solana became the first blockchain platform to reach 50,000 transactions per second. And a number of large investment funds, such as Grayscale and CoinShares, have added SOL to their portfolios.

SOL is a token that is used to pay for transactions and services on the Solana platform. It can also be used for staking to help support the network. The SOL/USD rate in 2023 has increased by more than 1000%!

At the same time, SOL now ranks 4th in terms of capitalisation of cryptocurrencies — after BTC, ETH, and the USDT stablecoin. December was the month when the price of the SOL token exceeded the psychological level of USD 100 for the first time since April 2022 (the historical high reached in the fall of 2021 exceeds the USD 250 level for SOL).

But will the price be able to stay above USD 100?

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. 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]

2023 In Review: A Look Back At The Highlights Of The Year

The year 2023 commenced after two years of economic uncertainty and heavy inflation across Europe and North America, home to leading financial markets, with major currencies such as the euro and the US dollar, and financial hubs including London, New York, Chicago, Frankfurt, and Toronto.

These continents, where major stock exchanges operate and the S&P 500, NASDAQ, and FTSE 100 indices represent the top stocks of the top listed companies in Britain and the US, witnessed a dynamic interplay of economic recovery, inflation challenges, and policy adjustments.

The European and North American economies had spent 2023 recovering from a sustained period of inflation and cost of living issues (Britain and mainland Europe), and in the US, yet more bank collapses and a close call with state insolvency as the US Government had to raise the debt ceiling to stop it defaulting on its existing commitments, highlighting the country's huge national debt.

Inflation did decline during 2023, but central bank policy on both sides of the Atlantic favoured continued increases in interest rates, despite the US inflation going down from 11% in mid-2022 to around 3.1% now, and the British inflation rate is 3.9% now whereas it was also in double figures during 2022. Now, we move on to looking at specific markets.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. 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.

 

[Gerra]

Countries' economies are recovering.

 

[FXOpen Trader]

Market Analysis: Dollar Corrects in Thin Market

The American currency is strengthening slightly after Christmas. Thus, the pound/US dollar currency pair retreated from the recent high just above 1.2700 and the US dollar/yen pair found support at 142.00. The euro/US dollar pair is trying to retest Friday’s high at 1.1040. Both the Australian and Canadian currencies continue to rise against the dollar.

USD/JPY

A block of data from Japan published this morning contributed to a slight strengthening of the USD/JPY pair, as the incoming fundamentals turned out to be quite weak. Thus, the core consumer price index (CPI) from the Bank of Japan decreased to 2.7% against the forecast of 3.00%. The price index for corporate services also fell: 2.3% versus 2.4%. Also in the red zone was the ratio of vacancies to applicants: 1.28 to 1.30. Today at 21:00 GMT+3, it is worth paying attention to the publication of data on the auction for the placement of 2-year US Treasury notes.

On the daily and weekly USD/JPY chart, the pair is below the alligator lines, the priority is to sell on the breakdown of the lower fractal at 140.90. We can consider cancelling the downward scenario if the price confidently consolidates above 145.00.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. 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]

EUR/USD Extends Rally While USD/JPY Revisits Support

EUR/USD gained bullish momentum above the 1.0985 resistance. USD/JPY is declining and showing bearish signs below the 142.85 level.

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

• The Euro remained in a bullish zone and climbed above the 1.0985 resistance zone.
• There is a key bullish trend line forming with support near 1.1020 on the hourly chart of EUR/USD at FXOpen.
• USD/JPY is trading in a bearish zone below the 143.40 and 142.85 levels.
• There was a break above a major bearish trend line with resistance near 142.25 on the hourly chart at FXOpen.

EUR/USD Technical Analysis

On the hourly chart of EUR/USD at FXOpen, the pair started a fresh increase above the 1.0930 zone. The Euro climbed above the 1.0985 resistance zone against the US Dollar.

The pair even settled above the 1.1020 resistance and the 50-hour simple moving average. Finally, it tested the 1.1040 resistance. A high is formed near 1.1044 and the pair is now consolidating gains.

If there is a downside correction, the pair might test the 23.6% Fib retracement level of the upward move from the 1.0929 swing low to the 1.1044 high at 1.1020. There is also a key bullish trend line forming with support near 1.1020 and the 50-hour simple moving average.

The next major support is near the 50% Fib retracement level of the upward move from the 1.0929 swing low to the 1.1044 high at 1.0985.

If there is a downside break below 1.0985, the pair could drop toward the 1.0930 support. The main support on the EUR/USD chart is near 1.0910, below which the pair could start a major decline.

On the upside, the pair is now facing resistance near 1.1040. The next major resistance is near the 1.1065 level. An upside break above 1.1065 could set the pace for another increase. In the stated case, the pair might rise toward 1.1120.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. 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]

Brent Oil Price Reaches New December High

Financial markets are experiencing a traditional decline in trading activity associated with the holiday period. Notable events:

the S&P-500 and NASDAQ-100 stock indices updated their maximum for the year after the holiday Monday, thereby confirming the idea that the decline on Wednesday, September 20, was in the nature of a correction. Santa and his rally do not disappoint.
The dollar index drops to six-month lows due to expectations of an interest rate cut in March 2024.
The price of oil reached a new high in December.

The rise in oil prices is caused by geopolitical tensions:

WSJ: Iran-backed militias fire at US bases in the Middle East.
Bloomberg: Continued Houthi attacks on shipping and US strikes on targets in Iraq raise the risk of the war expanding in the Middle East.
Reuters: The war in Gaza will last several months. Concerns about the spread of the conflict are growing.
Barron's: Dispute between Venezuela and Guyana could threaten oil production and higher prices.

If military action disrupts the production and supply of oil, this could sharply increase its price.

The XBR/USD chart shows that:

the price is still in a downtrend (as shown by the red channel);
moving within the ascending channel (shown in blue) in December, the price has reached the upper limit of the red channel, and is now in a vulnerable position.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. 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]

FTSE 100 Continues Pre-holiday Rally: Is 8000 in Sight?

Almost a year ago, the FTSE 100, which is a prestigious index comprising the most prestigious blue-chip stocks of companies listed on the London Stock Exchange, hit 8,000 points for the first time in history.

The euphoria that accompanied this historic breakthrough in mid-February 2023 echoed a similar response in 2021 when the index broke the 7,000 barrier for the first time ever. However, the brief venture above the 8,000 mark was relatively short-lived, and since then, the FTSE 100 index has languished anywhere between the mid-7,200 range up to the 7,700s during the last three quarters of this year.

Before the markets made their annual break for the holiday season that has just passed, the FTSE 100 index began to show a steady upward climb, which has been relatively consistent since October 27's low point of 7,259 at FXOpen.

Now, with the markets reopening this week, the FTSE 100's upward direction has continued to demonstrate buoyancy, and the possibility of reaching the lofty heights of 8,000 points is once again being openly discussed by market participants.

As the London trading session opened this morning, the FTSE 100 index jumped from 7,715 to 7,742 at FXOpen, giving further weight to opinions in mainstream media last week that a revisitation of the 8,000 mark may be in sight.

The reasons for this rally are being viewed by many analysts and commentators in a very basic form, largely centred on the possibility that central banks in Western continents, in which the main headquarters of companies listed in London and included in the FTSE 100 index, may reduce their interest rates as the talks about ending the prolonged policy of increasing them over recent years in an attempt to counter inflation.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. 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]

ETH/USD Analysis: New Record of the Year

Today, the price of Ethereum exceeded the level of 2,440 per token, thereby setting a new high for 2023. It is noteworthy that the price of Bitcoin did not support the bullish sentiment, continuing to fluctuate around the USD 43,000 level for the fifth day.

What is the reason for the growth of ETH/USD from a fundamental point of view? There is no obvious trigger in the media, so we can only make assumptions:

→ market participants considered ETH an undervalued asset against the backdrop of the growth of Bitcoin and Solana;

→ perhaps buyers assume that after the expected approval of applications for the BTC ETF, the ETH ETF story will be next?

→ Santa's rally and the positive sentiment associated with it.

From a technical point of view, the price of ETH/USD moved up beyond the balance period “B”, where the forces of supply and demand were balanced. The bullish momentum was maintained, with upward momentum above the 2,333 level attracting followers and forcing short sellers to take losses. According to on-chain analytical platforms, in just one hour, at the peak of growth, USD 14 million of bearish positions were liquidated on cryptocurrency exchanges—there was a short squeeze in the market to some extent.

What's next? Will the price be able to form a new balance period “C”, which will be above the period “B” (similar to the trend “A” → “B”)?

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. 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 Index Shows Signs of Weakness

As the comparison chart shows, the ESX50 lags behind the US500. And this trend has been observed since mid-December, a period when central banks around the world published interest rate decisions and set expectations for the future. The divergence suggests that Europe's central bankers are in no rush to join the US turn to lower interest rates — even as investors continue to insist that they will have to accept easier monetary policy soon enough.

According to Bloomberg, after Federal Reserve Chairman Jerome Powell signalled that the focus is now on lowering borrowing costs, colleagues from Frankfurt to London said that a further slowdown in inflation cannot be taken for granted. That is, for now in Europe, policy easing is not yet on the agenda.

“We should absolutely not lower our guard,” European Central Bank President Christine Lagarde told reporters in December, while her Bank of England counterpart Andrew Bailey noted there was “still work to be done” in the fight to rein in consumer prices.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. 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]

Brent Crude Oil Dips Back Below $80 Mark Despite Middle East Escalation

The commodities market is a wide-ranging and varied one, largely because the different physical products represent different uses. Oil is one of those rare commodities that is an actual consumable item, and due to its nature as a staple raw material for fuel production, combined with its concentration within certain countries that extract and sell it, its value is often intrinsically linked to geopolitical events and economic circumstances.

Currently, Brent Crude Oil is under some degree of observation by analysts and market participants due to its steadily decreasing value which has been consistent for the most part over the past two and a half months since the beginning of the war, which is taking place in the Middle East, a contrary pattern to what may be expected, when ordinarily circumstances like this cause increases.

Historically, oil prices across the board have been dramatically affected by wars involving Israel and its neighbouring countries, largely because many of the OPEC countries which supply oil globally are Middle Eastern nations and members of the Arab League.

For example, in 1973, during the Yom Kippur War, the OPEC nations imposed an oil embargo against the United States in an attempt to reverse the decision by the US government to supply weapons and funding to the Israel Defense Forces, resulting in fuel rationing and the imposition of a 55 miles per hour speed limit, as well as spiralling oil prices.

Despite the discourse from many OPEC countries relating to the current political situation and the escalation of war between Israel and the Gaza Strip, the price of Brent Crude Oil has actually decreased over recent days. During these recent days, there has been further escalation to the extent that other surrounding nations may begin a campaign against Israel.

On December 26, Brent Crude Oil was trading at $80.50 per barrel at FXOpen; however, by the next day, it returned to below the $80 per barrel mark and hit $79.15 at FXOpen at the end of trading yesterday before a slight rebound in the very early hours of the morning to $79.52 at FXOpen.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. 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.