Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
In the not-so-distant past, Forex trading was primarily driven by intuition, market experience, and fundamental analysis. However, the introduction of Forex chart indicators revolutionised the landscape, providing traders with a powerful analytical tool that transformed decision-making.
A trader using chart indicators Source: Shutterstock
Forex chart indicators brought a scientific approach to trading, enabling traders to objectively analyse historical price data and predict potential future price movements. Traders could now identify patterns, trends, and market behaviour, allowing for more accurate entry and exit points. This shift from gut-feeling trading to data-driven analysis was similar to shedding light on a previously dimly lit path.
By empowering traders with a plethora of indicators from Moving Averages to Bollinger Bands, RSI, MACD, and more – charting tools equipped them with a deeper understanding of market dynamics. These indicators acted as beacons, illuminating market trends, volatility, and momentum. Traders could fine-tune their strategies, manage risk, and optimise their trades for greater profitability.
Furthermore, the advent of technology, especially online trading platforms democratised access to these indicators. What was once exclusive to institutional traders and professionals became readily available to individual traders. Now, traders, whether seasoned or beginners, could harness the power of chart indicators to level the playing field.
Today, Forex chart indicators are an integral part of every trader’s toolkit. They have shifted trading from speculative guessing to informed decision-making, contributing to the growth and accessibility of the Forex market. This evolution underscores the profound impact of technology and analytics on the financial world, ushering in a new era of possibilities for traders around the globe.
Chart indicators Source: Investgrams
What are Chart Indicators?
Chart indicators are fundamental tools used in financial analysis, specifically in the domain of Forex trading. These tools are grounded in mathematical calculations and are applied to a variety of market data, such as price and volume, to provide insights into market trends and potential future price movements.
The primary objective of chart indicators is to assist traders in understanding the complex dynamics of the market and to aid in the development of effective trading strategies. Through careful interpretation of these indicators, traders can make informed predictions about the likely changes in price, enabling them to execute timely decisions to either maximise gains or minimise losses.
At the core of chart indicators lies mathematical algorithms. These algorithms process historical and real-time market data to generate specific values, often displayed on charts, that traders can analyse. The calculations involved in these indicators may consider various parameters, including price, volume, or a combination of both, depending on the type of indicator being used.
A trader using chart indicators Source: Shutterstock
How Do Chart Indicators Help Traders?
Chart indicators function as a lens that magnifies and simplifies the intricate market dynamics. They help traders identify patterns, trends, and potential turning points, giving a clear view of the market’s behaviour. For example, a moving average smoothes out price data, revealing the underlying trend more clearly.
Understanding market dynamics is pivotal in devising successful trading strategies. Chart indicators equip traders with crucial information, allowing them to strategise their trades. For instance, an RSI reading above 70 might indicate an overbought market, prompting traders to consider selling, while a reading below 30 could suggest an oversold market, potentially signalling a buy opportunity.
The ultimate goal of employing chart indicators is to foresee how prices might change in the future. By interpreting these indicators and recognising patterns or signals, traders gain insights into potential price shifts. This foresight enables them to make timely decisions – be it entering or exiting a trade – aiming to maximise profits during price upswings and mitigate losses during downturns.
Chart indicators Source: Sofien Kaabar, CFA – Medium
Types of Popular Chart Indicators
Before delving deeper into the world of Forex chart indicators, it’s essential to understand the diverse range of tools available to traders. In this section, we’ll explore an array of popular chart indicators, each with its unique characteristics and insights into market behaviour. These indicators serve as essential instruments for traders, providing valuable signals and helping navigate the complex Forex landscape with confidence.
Moving Averages
Moving averages are foundational in technical analysis, smoothing price data for a clear trend representation over a specified time frame. Types include Simple Moving Averages (SMA), Exponential Moving Averages (EMA), and Weighted Moving Averages.
SMAs give equal weight to each price point, suitable for trend identification. EMAs prioritise recent prices, making them responsive to market shifts. Weighted Moving Averages emphasise specific data points, allowing flexible customisation. Traders experiment with these types to match their strategy and market conditions.
Relative Strength Index (RSI)
RSI, a key momentum indicator, gauges both the speed and change of price movements within a given period. By doing so, it provides traders with valuable insights into overbought and oversold conditions, aiding in the assessment of potential trend reversals or continuations.
RSI values above 70 usually suggest overbought conditions, implying a possible price correction or trend reversal, while values below 30 typically indicate oversold conditions, potentially signalling a buying opportunity. This indicator serves as a critical tool in a trader’s toolkit for understanding market sentiment and making informed decisions.
Bollinger Bands Source: Investopedia
Bollinger Bands
Bollinger Bands, a widely-used volatility indicator, consist of a middle band, typically a 20-day simple moving average (SMA), flanked by an upper and lower band. The upper band is calculated by adding two times the 20-day SMA’s standard deviation to the SMA, while the lower band is obtained by subtracting two times the standard deviation from the SMA.
These bands dynamically adjust to market volatility, widening during volatile periods and narrowing during calmer phases. When prices approach the upper band, it may signify overbought conditions, potentially indicating a sell opportunity, while nearing the lower band may suggest oversold conditions, hinting at a buy opportunity.
MACD (Moving Average Convergence Divergence)
MACD is a versatile indicator illustrating the relationship between two moving averages, highlighting changes in market momentum. It’s calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA, resulting in the MACD line. A 9-day EMA of the MACD line, called the signal line, identifies buy or sell signals.
When the MACD line crosses above the signal line, it generates a bullish signal, suggesting a potential uptrend, and vice versa for a bearish signal. The histogram, representing the difference between the MACD line and the signal line, visualises trend strength and direction. Traders use MACD to identify entry and exit points, aiding in informed trading decisions.
Stochastic Oscillator
The Stochastic Oscillator, a momentum indicator, compares a security’s closing price to its price range over a specified time period, typically 14 periods. It generates values between 0 and 100, indicating the closing price’s position within the price range.
A value near 0 indicates that the closing price is at the low end of the range, signifying potential oversold conditions, while a value near 100 suggests the closing price is at the high end of the range, hinting at potential overbought conditions. Traders use this information to identify possible trend reversals or continuation patterns, aiding in strategic decision-making.
Fibonacci Retracement Source: Investopedia
Fibonacci Retracement
Fibonacci Retracement, a widely utilised tool, employs horizontal lines to identify crucial areas of potential support or resistance based on key Fibonacci levels. These levels – notably 23.6%, 38.2%, 50%, 61.8%, and 78.6% – are derived from the Fibonacci sequence.
Traders utilise these retracement levels to gauge possible points of price reversal or continuation, assisting in making informed trading decisions.
Ichimoku Cloud
The Ichimoku Cloud, a comprehensive technical indicator, offers a holistic view of support/resistance levels, trends, and momentum. It consists of several components, including the cloud (or “Kumo”), Tenkan-sen, Kijun-sen, Senkou Span A, and Senkou Span B.
The cloud represents an area of potential support or resistance, providing traders with valuable insights into market trends and aiding in the identification of potential trade opportunities based on the relationship between the components and the price.
Keltner Channel
The Keltner Channel, a volatility-based indicator, is a powerful tool used to assess market volatility and potential trend reversals. It consists of an upper band, calculated by adding the average true range (ATR) of an asset to a simple moving average (SMA), and a lower band, obtained by subtracting the ATR from the SMA.
When prices approach the upper band, it indicates increased volatility and a potential trend reversal, offering traders valuable information for their trading strategies.
Parabolic SAR (Stop and Reverse)
The Parabolic SAR (Stop and Reverse) is a versatile technical indicator designed to identify potential entry and exit points in a market. It places dots either above or below the price chart, indicating potential trend changes.
When the dots are above the price, it suggests a downward trend, signaling a possible sell opportunity. Conversely, when the dots are below the price, it indicates an upward trend, suggesting a potential buy opportunity. Traders use these signals to make informed decisions and effectively manage their trades.
Williams %R Source: Investopedia
Williams %R
Williams %R, an important oscillator, aids traders in identifying overbought or oversold market conditions within a specific timeframe, typically 14 periods. The indicator provides a numerical value between -100 and 0, with values approaching -100 indicating oversold conditions and values nearing 0 indicating overbought conditions.
Traders utilise these readings to make timely decisions, potentially entering a trade when the market is oversold and exiting or shorting when it’s overbought.
Average Directional Index (ADX)
The Average Directional Index (ADX) is a pivotal indicator for traders, measuring the strength of a market trend. It provides a numerical value typically between 0 and 100, with higher values indicating a stronger trend.
When the ADX value is low, it suggests a weak or absent trend, aiding traders in identifying ranging markets. Conversely, a high ADX value signifies a robust trend, assisting traders in assessing the potential for trend-based trading strategies.
A trader using chart indicators Source: Shutterstock
How to Use Chart Indicators Effectively
To optimise chart indicators for effective trading:
Combine indicators: Utilise multiple indicators, like RSI, MACD, and moving averages, to form a comprehensive analysis. This offers a well-rounded view of the market dynamics.
Spot trends and points: Chart indicators help identify trends (up, down, or sideways), potential trend reversals, and precise entry or exit points for trades.
Customise parameters: Adjust indicator parameters, such as period lengths or sensitivity, to suit specific trading strategies and the asset being traded. Tailoring these parameters enhances indicator effectiveness.
Practice and adapt: Continuously practice using indicators and adapt them to changing market conditions. This hands-on experience fine-tunes your understanding and application of these tools, leading to improved decision-making.
In conclusion, understanding popular chart indicators is a crucial step for non-professional traders aiming to enhance their Forex trading strategies. By leveraging these indicators effectively, traders can make informed decisions and navigate the Forex market with increased confidence. Experiment with different indicators and find the ones that align with your trading style and goals, ultimately enhancing your trading success. Best of luck with your trades!
Summary:
Chart indicators transformed Forex trading from intuition-based to data-driven analysis.
Chart indicators use mathematical algorithms on market data to generate specific values for analysis.
Traders can identify patterns, trends, and market behaviour for accurate entry and exit points.
Several significant market developments are expected to impact the financial markets this week. In particular, we await the release of the US Consumer Price Index (CPI) and Producer Price Index (PPI). Given the potential impact of these announcements, we strongly recommend traders to exercise caution in their trading preparations, taking into account the possibility of increased market volatility.
Here are some essential economic highlights to monitor throughout the week:
US Producer Price Index (11 October 2023)
Producer prices in the US increased by 0.7% in August 2023, the highest level since June 2022.
New PPI data will be released on 11 October, with analysts expecting a 0.3% increase.
UK Gross Domestic Product (12 October 2023)
The British economy contracted by 0.5% month-over-month in July 2023, marking the largest decline of the year. This also represented a reversal from the 0.5% growth observed in June.
Data for August is scheduled for release on 12 October, with analysts anticipating a 0.2% increase.
US Consumer Price Index (12 October 2023)
Consumer prices in the US increased by 0.6% month-over-month in August 2023, following a 0.2% rise in July.
Analysts expect a 0.3% increase in the figures for September, which are set to be released on 12 October.
FOMC Meeting Minutes (12 October 2023)
During its September 2023 meeting, the Federal Open Market Committee (FOMC) maintained the target range for its funds rate at a 22-year high of 5.25%–5.5%, following a 25 bps hike in July.
The central bank signalled the possibility of another rate hike later this year, following potential meetings in November or December 2023.
University of Michigan Consumer Sentiment Index (13 October 2023)
The University of Michigan Consumer Sentiment Index for the US increased to 68.1 in September 2023.
Analysts expect the index to drop to 67.4 in the next set of published data.
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
During cautious investor sentiment and rising concerns about surging Treasury yields, the stock market saw a minor dip as job market data loomed on the horizon. The Dow Jones Industrial Average closed slightly lower, while consumer staples companies faced substantial losses. Meanwhile, the US dollar underwent a correction due to overbought conditions, influenced by declining Treasury yields and disappointing economic data. In the currency market, the EUR/USD pair rebounded, and the USD/JPY pair saw a decrease, impacting speculators. Sterling rose, and the Australian dollar saw gains, while crude oil prices dropped significantly. Amidst all this, the S&P 500 remained above its 200-day moving average, leaving investors eagerly awaiting the forthcoming job market data’s potential impact on interest rates and the stock market.
Stock Market Updates
On Thursday, the stock market experienced a slight downturn as investors anxiously awaited key job market data scheduled for release on Friday. The Dow Jones Industrial Average closed with a minor loss of 9.98 points, or 0.03%, settling at 33,119.57, while the S&P 500 dipped 0.13% to 4,258.19, and the Nasdaq Composite dropped 0.12% to finish at 13,219.83. Notably, consumer staples companies bore the brunt of the market losses, with Molson Coors shares falling by 6.3%, and Mondelez International and Clorox both declining by over 5%.
Investor sentiment remained cautious as weekly initial jobless claims came in at 207,000, a mere 2,000 increase from the prior week, falling just short of economists’ expectations of 210,000. While this slight rise in jobless claims was in line with market predictions, it was disappointing to some investors hoping for signs of a labor market downturn that might influence the Federal Reserve’s interest rate decisions. The 10-year Treasury yield initially ticked up but ultimately decreased to 4.714%, reflecting the ongoing uncertainty in the market as it transitions from a low-rate environment to a more normalized one. On Friday, the market eagerly anticipated nonfarm payrolls data for September, with economists projecting a gain of 170,000 jobs, a decline from the previous month, as investors hoped for labor market softening that could potentially affect rate hikes and Treasury yields.
Despite a slight boost in stocks on Wednesday, following positive payroll data from ADP, both the broad market index and the Dow are on track for a losing week. The Dow declined by 1.16% over the week and turned negative for the year during Tuesday’s market selloff, while the S&P 500 is down 0.7% for the week, and the Nasdaq has remained relatively flat. Overall, investors are closely monitoring labor market data to gauge potential changes in interest rates and their impact on the stock market.
On Thursday, the overall market showed a slight decline of -0.13%. Real Estate and Health Care sectors performed well, with gains of +0.67% and +0.49% respectively. Financials and Information Technology also saw growth at +0.38% and +0.25%. However, Communication Services, Utilities, Consumer Discretionary, Energy, Industrials, and Materials sectors all experienced declines, ranging from -0.12% to -1.26%. Consumer Staples recorded the most significant drop, with a decline of -2.07%.
Currency Market Updates
The US dollar faced a decline in its value, as reflected by the dollar index, which retreated on Thursday. This depreciation was attributed to the overbought state of the US currency, influenced by declining Treasury yields. The correction was initiated following disappointing ADP payroll data and mediocre ISM services data earlier in the week, and it was not alleviated by Thursday’s job claims data. Investors were also concerned about the significant increase in 10-year Treasury yields, which had surged from 4.06% to 4.88% since a correction low in September. This surge in yields amplified financial risk beyond the Federal Reserve’s rate increases, potentially reducing the need to maintain high-interest rates for an extended period. While Fed speakers have maintained a hawkish stance, there were worries that soaring Treasury yields could intensify tightening efforts and disinflation. Chicago Federal Reserve Bank President Austan Goolsbee expressed optimism about the economy’s path toward 2% inflation without excessive recession risk.
In the currency market, the EUR/USD pair exhibited a recovery despite challenges, breaching the 10-day moving average. This rebound occurred even as German August exports fell short of forecasts, and an ECB policymaker, Francois Villeroy de Galhau, pointed out that the spike in yields argued against another rate hike. The USD/JPY pair saw a 0.5% decrease as Treasury-JGB yield spreads declined, influenced by factors such as 10-year JGB yields rising to their highest levels since 2013. These developments impacted speculators who were looking for a breakout in USD/JPY, with their expectations dashed by a recent plunge in the pair. Sterling, on the other hand, experienced a 0.45% rise and surpassed resistance levels for the first time since early September, although oversold buy signals would require a close above last Friday’s swing high and weaker-than-anticipated U.S. jobs data for confirmation. Additionally, the Australian dollar rose by 0.7% as high-beta currencies rebounded due to the pullback in Treasury yields and a shift towards derisking, while crude oil prices fell by over 2% following a significant drop the previous day, driven by concerns about demand. Meanwhile, the S&P500 remained above its 200-day moving average.
Picks of the Day Analysis
EUR/USD (4 Hours)
EUR/USD Gains Ground as US Dollar Weakens, Awaiting Jobs Data
The EUR/USD has experienced a two-day climb, nearing the 1.0550 level, driven by a softer US dollar, although the overall trend remains bearish, with future direction dependent on forthcoming US jobs data. Germany’s recent economic indicators reveal a sluggish outlook, reinforcing expectations that the European Central Bank is unlikely to raise interest rates. In the US, despite mixed job market data, a decrease in US yields and a rebound in equities have weakened the Greenback. The upcoming US Nonfarm Payrolls report will be pivotal in determining the EUR/USD’s path, with a strong report poised to reinforce the bearish trend and weak numbers potentially extending the recovery.
Based on technical analysis, the EUR/USD went up on Thursday and managed to reach the upper band of the Bollinger Bands. Right now, the EUR/USD is trading below the upper band, which suggests a chance for a small downward move to reach the middle band of the Bollinger Bands. The Relative Strength Index (RSI) is at 56, indicating that the EUR/USD is currently trying to return to a neutral position.
Resistance: 1.0558, 1.0616
Support: 1.0489, 1.0406
XAU/USD (4 Hours)
XAU/USD Nears Multi-Month Low as Dollar Corrects Amid Economic Concerns
The XAU/USD pair is trading close to a recent multi-month low of $1,813 per troy ounce, marking its ninth consecutive day of decline. Despite the US Dollar’s correction from multi-month highs, Gold struggles to attract buyers. Concerns over persistent inflationary pressures and a tight labor market persist as investors remain cautious, driven by hawkish comments from Federal Reserve officials and mixed employment sector signals. With the release of the September Nonfarm Payrolls report looming, the stability in US Treasury yields at slightly lower levels is preventing a near-term Dollar rally.
Based on technical analysis, XAU/USD exhibited consolidation on Thursday. It creates a narrow band of the Bollinger Bands. Currently, the price of gold is squeezed by the bands which indicate that the market is still in waiting mode. The Relative Strength Index (RSI) currently stands at 38, signaling a bearish bias for the XAU/USD pair.
As part of our commitment to provide the most reliable service to our clients, there will be server maintenance this weekend.
Maintenance Hours :
7th of October 2023 (Saturday) 02:00 – 05:00 (GMT+3)
Please note that the following aspects might be affected during the maintenance:
1. The price quote and trading management will be temporarily disabled during the maintenance. You will not be able to open new positions, close open positions, or make any adjustments to the trades.
2. There might be a gap between the original price and the price after maintenance. The gaps between Pending Orders, Stop Loss and Take Profit will be filled at the market price once the maintenance is completed.
3. Please refer to MT4/MT5 for the latest update on the completion and market opening time. Our services will be back online once the maintenance is completed.
Thank you for your patience and understanding about this important initiative.
If you’d like more information, please don’t hesitate to contact [email protected]
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
To provide a favorable trading environment to our clients, VT Markets will modify the trading setting of US Shares on October 16, 2023:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
Friendly reminders:
1. All specifications for US shares stay the same except leverage.
2. The margin requirement of the trade may be affected by this adjustment, please make sure the funds in your account are sufficient to hold the position before this adjustment.
If you’d like more information, please don’t hesitate to contact [email protected].
On Wednesday, the Dow Jones Industrial Average ended a three-day losing streak as Treasury yields pulled back from multiyear highs. The Dow gained 0.39%, while the S&P 500 and Nasdaq also showed positive performances. Notable sector performances included the consumer discretionary sector, boosted by Tesla and Norwegian Cruise Line, and the energy sector, which suffered due to a drop in crude prices. These market movements followed the release of weak private payrolls data, raising concerns about higher interest rates and their impact on the economy. Currency markets saw a decline in the US dollar as Treasury yields and oil prices retreated, adding to uncertainty in the market. All eyes were on Friday’s jobs report for insights into the labor market and the direction of equities and interest rates.
Stock Market Updates
On Wednesday, the Dow Jones Industrial Average snapped a three-day losing streak in response to a pullback in Treasury yields, which had reached multiyear highs. The 30-stock index gained 127.17 points, or 0.39%, closing at 33,129.55. The S&P 500 also showed a positive performance, increasing by 0.81% and closing at 4,263.75, while the Nasdaq Composite surged by 1.35% to close at 13,236.01. Notable among sector performances within the S&P 500 was the consumer discretionary sector, which stood out as the best performer, with a rise of approximately 2%. This boost was primarily attributed to strong gains from Tesla, up by 5.9%, and Norwegian Cruise Line, up by 3.8%. In contrast, the energy sector was the worst-performing sector for the day due to a significant drop in crude prices. Devon Energy and Marathon Oil both saw declines of around 5%, while SLB and Halliburton dropped more than 4%.
These market movements came after the release of new jobs data, which revealed that only 89,000 private payrolls were added in the previous month, significantly below the Dow Jones forecast of 160,000 and even lower than the upwardly revised figure of 180,000 payroll additions for August. Consequently, Treasury yields pulled back slightly from their 2007-level highs, with the 10-year Treasury yield trading at 4.735%. The market has been grappling with concerns over higher interest rates, which have raised fears of a potential recession and pushed mortgage rates to nearly 8%, causing mortgage demand to plummet to its lowest levels since 1996. Investors are eagerly awaiting the release of September’s nonfarm payrolls data on Friday, hoping for more insights into the labor market’s strength and the future direction of equities and interest rates. The recent divergence between fixed income and equities has left investors on edge, and the market is being heavily influenced by movements in interest rates.
On Wednesday, across all sectors, the market experienced a positive trend with a gain of 0.81%. The sectors that performed particularly well include Consumer Discretionary (+1.97%), Communication Services (+1.28%), Information Technology (+1.25%), Materials (+1.19%), Real Estate (+1.13%), and Financials (+0.83%). On the other hand, some sectors had a less favorable day, with Consumer Staples (+0.73%), Health Care (+0.45%), Industrials (+0.38%) recording more modest gains. Utilities (-0.09%) saw a slight decline, while Energy had a significant decrease of -3.36%.
Currency Market Updates
In recent currency market updates, the US dollar experienced a decline of 0.27% as Treasury yields and oil prices retreated, prompting market participants to contemplate the potential adverse economic consequences and the sustainability of these trends. The uncertainty was evident in the performance of USD/JPY, which had previously witnessed a significant drop from its 2023 peak, ranging from 150.165 to 147.30 on Tuesday, while crude oil prices collapsed. The day’s US economic data, including ADP’s 89,000 employment increase, falling short of the expected 153,000, added to the uncertainty. This was further compounded by the upcoming non-farm payrolls report, with forecasts predicting a decline from 187,000 to 170,000, a key market indicator. ISM services remained on par with forecasts at 53.6, showing a slight dip from the previous month, primarily due to a significant drop in new orders, which fell from 57.5 to 51.8, reaching a nine-month low. Notably, the article highlighted that the eurozone was expected to contract in the third quarter, while the US Q3 GDP forecasts remained optimistic at 4.9% annualized. In terms of monetary policy, the European Central Bank (ECB) was seen as less likely than the Federal Reserve (Fed) to raise interest rates again.
Amid this context, the EUR/USD currency pair saw a 0.37% rise, primarily driven by the broader weakening of the US dollar and a 7-basis point rebound in 2-year bund-Treasury yield spreads. The pair’s rebound from Tuesday’s low of 1.0448 may depend on Friday’s payrolls report echoing the soft ADP data from Wednesday. USD/JPY remained relatively flat within a narrow trading range of around 149, particularly after bouncing back from a notable decline that saw it drop from 150.165 to 147.30 on Tuesday. Concerns over potential Japanese intervention to bolster the yen’s value left the USD/JPY uptrend in a state of uncertainty. Meanwhile, the British pound experienced a 0.5% increase, partly due to a positive revision in the UK’s September PMIs, despite the fact that the PMI figures still indicated contraction below the 50 mark. These market dynamics occurred in the backdrop of 10- and 30-year Treasury yields falling after testing crucial resistance levels earlier on Wednesday. As the week progressed, all eyes were on Friday’s jobs report, which was anticipated to have a substantial impact on the currency markets.
Picks of the Day Analysis
EUR/USD (4 Hours)
EUR/USD Struggles to Hold Ground Against Strengthening US Dollar Amid Rising Yields and Weak Economic Data
The Euro, after recovering from a year-low against the US Dollar, is facing challenges in maintaining its position above 1.0500. Rising government bond yields, with the German 10-year yield hitting its highest level since 2011, are causing concern among investors. Additionally, economic data from the Eurozone, including a negative shift in the Producer Price Index and a decline in Retail Sales, are adding to the Euro’s woes. While the European Central Bank remains cautious about interest rates, the US Dollar continues its upward trend, supported by strong fundamental factors and upcoming employment data releases.
Based on technical analysis, the EUR/USD went up on Wednesday and managed to reach the middle line of the Bollinger Bands. Right now, the EUR/USD is trading above the middle line, which suggests a chance for a small upward move to reach the upper line of the Bollinger Bands. The Relative Strength Index (RSI) is at 53, indicating that the EUR/USD is currently trying to return to a neutral position.
Resistance: 1.0538, 1.0605
Support: 1.0489, 1.0406
XAU/USD (4 Hours)
XAU/USD Holds Steady Around $1,820 as Investors Seek Yield Amid Uncertain Market Signals
Gold prices remained relatively stable on Wednesday, with little movement as they hovered around the $1,820 mark. While initial demand for the precious metal appeared before Wall Street’s opening, it was short-lived, as investors turned to high-yield assets. Financial markets sought direction from government bond yields and US economic data but found few clear signals. The 10-year Treasury note yield reached its highest level since 2007 before easing, while the US Dollar traded near daily lows, reflecting a modest improvement in market sentiment amid mixed economic figures.
Based on technical analysis, XAU/USD exhibited consolidation on Wednesday. It reached the downward-sloping middle line of the Bollinger Bands. Currently, the price of gold is trading around the middle line, indicating the potential for further consolidation throughout the day, given the narrowing of the Bollinger Bands. The Relative Strength Index (RSI) currently stands at 37, signaling a bearish bias for the XAU/USD pair.
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
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