Comprehensive EUR/USD Analysis for October 10, 2023

At Ultima Markets, we are dedicated to providing you with insightful market analysis to help you make informed trading decisions.

In today’s edition, we focus on the EUR/USD currency pair, delving into both fundamental and technical factors that may impact its performance in October 2023.

Key Takeaways

1. 1. Rising U.S. Treasury Yields: The recent surge in long-term U.S. Treasury yields has led to a substantial increase in borrowing costs. This development has garnered attention from influential figures in the financial landscape, including hawkish Logan and Fed Vice Chairman Jefferson.
   
2. 2. Fed’s Potential Pivot: Acknowledgments from Logan and Jefferson hint at a potential shift in the Federal Reserve’s stance on interest rate hikes. This shift could diverge from previous expectations, impacting the EUR/USD currency pair.
   
3. 3. Weakness in the U.S. Dollar: Notably, the U.S. dollar index is displaying signs of weakness in the upcoming week. The primary driver behind this trend remains the rising U.S. bond yields.

Fundamentals Impacting EUR/USD

The recent surge in long-term U.S. Treasury yields has substantially increased borrowing costs, reverberating throughout the financial markets. This development has garnered attention from key figures in the financial world, including the hawkish Logan and Fed Vice Chairman Jefferson.

Their acknowledgment of the impact of rising U.S. bond yields on financial conditions suggests a potential shift in the Federal Reserve’s stance on interest rate hikes. As a result, the U.S. dollar index is poised for a potentially weak trend in the coming week.

Technical Analysis

Daily Chart Insights

( Daily chart of EUR/USD, source: Ultima Markets MT4) 

Turning our attention to the daily chart, we observe the stochastic oscillator’s fast line crossing the slow line. However, it’s crucial to note that this indicator is approaching the 50 midline, while the market is in close proximity to the 17-day moving average.

These technical signals suggest the possibility of a market decline today. However, entering long positions should be contingent on a decisive market breakthrough, followed by close monitoring of retracement prices.

4-Hour Chart Analysis

(4-hour chart of EUR/USD, source: Ultima Markets MT4) 

On the 4-hour chart, there are indications of a head-and-shoulders bottom formation, though the price has not yet touched the neckline resistance area.

This scenario suggests the potential for a market correction in the near future.

1-Hour Chart Insights

(1-hour chart of EUR/USD, source: Ultima Markets MT4) 

Referencing the 1-hour chart, Ultima Markets’ pivot indicator designates the central price of the day as 1.05565. To navigate these levels effectively:

• Bullish sentiment prevails above 1.05565, with the first target at 1.05937 and the second target at 1.06114.

• On the other hand, a bearish stance should be taken below 1.05565, targeting 1.05392 as the first level and 1.05019 as the second.

Conclusion

In summary, the EUR/USD market in October 2023 is subject to a dynamic interplay of fundamental and technical factors.

Rising U.S. Treasury yields and the potential shift in the Federal Reserve’s stance are fundamental drivers, while technical indicators suggest the possibility of a market decline and the formation of a head-and-shoulders pattern.

Traders and investors are advised to exercise vigilance and closely monitor these developments, considering both fundamental and technical aspects.

Staying well-informed and adapting strategies accordingly is crucial for navigating the ever-evolving landscape of currency trading effectively.

For personalized investment guidance, consult our team of experts at Ultima Markets.

Disclaimer 

Comments, news, research, analysis, prices and other information contained in this article can only be regarded as general market information, provided only to help readers understand the market situation, and do not constitute investment advice. Ultima Markets will not be responsible for any loss or loss (including but not limited to any loss of profits) that may arise from the direct or indirect use or reliance on such information. 

BYD Overtakes Ford in August Car Sales: What Does It Mean for the Auto Industry?

According to TrendForce report, car sales in 37 markets around the world totaled 5.55 million units in August 2023, an increase of nearly 1% from July. The growth momentum came from the launch of new models for the autumn. 

(August Ranking of Auto Brand Sales Share)

The composition of the top ten brands is the same as last month. The top three are Toyota, Volkswagen, and Honda. The Chinese car manufacturer BYD replaced Ford and became the fourth-largest brand in August car sales.

BYD’s Remarkable Growth

BYD has converted all its models to new energy vehicles, so the lukewarm domestic demand in the Chinese market has less impact on it. BYD recorded a MOM growth of 5%, and the market share was only 0.1% behind the third-placed Honda.

However, Japanese car manufacturers also have contributions from markets such as Southeast Asia. Consequently, for BYD to surpass Honda in the global market, the key is its expansion speed in overseas markets.

Ford’s Decline in August Sales

Ford’s ranking fell to sixth place due to lower sales in Europe and the United States compared with the previous month, with sales declining by 6.7% month-on-month.  

Challenges and Variables in 2H23

Although the launch of autumn models will help new car sales, there are still many variables in 2H23, including the United Auto Workers (UAW) strike that has not yet ended; OPEC+ allies’ crude oil production cuts, etc.

Strategies for the Fourth Quarter

As the fourth quarter approaches, auto manufacturers will do their best to ensure smooth production, fulfill orders, and stimulate year-end sales, minimizing the impact of reduced order visibility caused by economic changes. 

Disclaimer  

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided. 

Comprehensive USDX Analysis for October 6, 2023

In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the USDX for 6th October 2023. 

The Core: Fundamental Factors

• ADP Employment Data: Recent ADP employment data showed a significant drop below expectations. This is a crucial indicator of labor market dynamics.
• Historically Low Jobless Claims: The announcement of 207,000 initial jobless claims last week, still at a historical low, underscores the robustness of the job market.
• Fewest Quarterly Layoffs: U.S. companies have reported the fewest quarterly layoffs in a year due to strong seasonal hiring plans. This is a significant positive signal for the economy.

The Turning Point: Interest Rates

The above factors collectively raise questions about the possibility of interest rate adjustments in the near future. The final decision hinges on the impending release of US non-farm employment data, due tonight. This data will be pivotal in shaping the USDX’s trajectory.

The Technical Aspect: USDX Trends

• Daily Chart Trends: On the daily chart, the US dollar index has experienced a two-day decline. The stochastic oscillator’s dead cross in the overbought area suggests a short-term downtrend.
• Bearish Trend: To confirm a bear trend, it’s crucial for the USDX to break effectively below its recent lows. The initial target rests near the blue 17-day moving average.
• Hourly Chart Insights: On the hourly chart, the market has breached the support level around 106.23. The ATR combination indicator confirms this breakdown.
• Pivot Indicator: As per Ultima Markets’ pivot indicator, the central price for the day is 106.200.

Daily chart of USDX

(Daily chart of USDX, source: Ultima Markets MT4) 

1-hour chart of USDX

Although it has increased the probability of a bear trend, it still needs to wait for the U.S. dollar index to effectively fall below the lowest price. The price may be relatively limited. The first target is near the blue 17-day moving average. 

(1-hour chart of USDX, source: Ultima Markets MT4) 

Pivot Indicators

On the 1-hour chart, the market fell below the support level around 106.23, and the ATR combination indicator hinted at the effectiveness of the breakdown. Waiting for the price to retreat and see if there is any chance of further downward movement. 

(Pivot Indicators for USDX, source: Ultima Markets MT4)

Potential Scenarios

According to the pivot indicator in Ultima Markets MT4, the central price of the day is 106.200. 

• Bullish Above 106.200: If the USDX remains above 106.200, the first target is 106.363, with a secondary target at 106.755.
• Bearish Below 106.200: In case the USDX dips below 106.200, the initial target is 105.805, with a secondary target at 105.640.

Legal Documents 

Ultima Markets, a trading name of Ultima Markets Ltd, is authorized and regulated by the Financial Services Commission “FSC” of Mauritius as an Investment Dealer (Full-Service Dealer, excluding Underwriting) (license No. GB 23201593). The registered office address: 2nd Floor, The Catalyst, 40 Silicon Avenue, Ebene Cybercity, 72201, Mauritius. 

Disclaimer   

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.

Copyright © 2023 Ultima Markets Ltd. All rights reserved. 

Disappointing ADP Job Report’s Impact on USD | October 2023 Analysis

According to ADP® National Employment’s September 2023 Report, Private businesses in the US hired 89K workers in September 2023, the least since January 2021 when private employers shed jobs, and well below market forecasts of 153K. It follows a revised 180K increase in August, compared to an initial 177K.

Large establishments drove the slowdown, losing 83K jobs and wiping out gains they made in August. On the other hand, small companies added 95K jobs and mid-sized ones 72K. Meanwhile, annual wage growth slowed to 5.9%, the 12th consecutive monthly decline. Pay gains also shrank for job changers to 9%. 

(US Employment Changes, ADP)

The dollar index fell below the 107.0 mark on Wednesday, following the release of a disappointing ADP jobs report. Nevertheless, the dollar remained near its strongest level since November 2022, bolstered by hawkish comments from Fed officials that continue to reinforce expectations of elevated interest rates for an extended period. 

(U.S. Dollar Index DXY)

Disclaimer  

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided. 

Comprehensive USD/CAD Analysis For October 5, 2023

In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the USD/CAD for 5th October 2023. 

Key Takeaways

• U.S. Economic Data: The release of subpar U.S. economic data acted as a catalyst for market movements. This data sent shockwaves through the forex market, causing traders to react by selling off the U.S. dollar.
• Crude Oil Market: Another significant factor was the impending destruction of crude oil demand. This development, coupled with the gloomy macroeconomic outlook, played a substantial role in shaping the forex landscape. As crude oil prices began to fall, the depreciation of currencies in energy-exporting countries gained momentum.
• Canadian Dollar’s Depreciation: The Canadian dollar, in particular, saw a short-term depreciation trend that intensified due to the interplay of these factors.

USD/CAD Technical Analysis

USD/CAD Weekly Chart

The weekly chart of USD/CAD in October 2023 revealed a pivotal development. The closing line for the week was on the verge of breaking through the suppression of the downward trend line, which had been in place since October of the previous year. Furthermore, the stochastic oscillator was on the cusp of reaffirming the upward trend.

(Weekly chart of USD/CAD, source: Ultima Markets MT4) 

USD/CAD 4-Hour Chart Analysis

Zooming in on the 4-hour chart, we identified a weakening of prices following the recent breach of the weekly downward trend line. The stochastic oscillator displayed a divergent downward trend, indicating that the exchange rate was likely entering an adjustment cycle.

(4-hour chart of USD/CAD, source: Ultima Markets MT4) 

USD/CAD 1-Hour Chart Insights

On the 1-hour chart, the 23.6% retracement level at 1.36923 emerged as an extremely critical support price. This level could potentially mark the end of the downward trend. Conversely, falling below this level would signify a breach of the weekly downward trend line, casting doubts on the legitimacy of the recent upward trend.

(1-hour chart of USD/CAD, source: Ultima Markets MT4) 

USD/CAD Pivot Indicator

(1-hour chart of USD/CAD, source: Ultima Markets MT4) 

According to the pivot indicator in Ultima Markets MT4, the central price of the day was 1.37375. 

• Bullish above 1.37375, the first target is 1.37846, the second target is 1.38264 
• Bearish below 1.37375, first target 1.36966, second target 1.36495 

Conclusion

In conclusion, October 2023 brought about a series of significant fundamental and technical developments in the USD/CAD forex market. Traders were faced with key decision points, influenced by a variety of factors, from U.S. economic data to crude oil prices.

The forex market remains inherently volatile, emphasizing the importance of informed, strategic, and responsive trading decisions.

At Ultima Markets, we are committed to providing valuable market insights to empower your trading decisions.

While this article offers a comprehensive overview of the USD/CAD situation in October 2023, it’s essential to keep a watchful eye on market developments and continue refining your trading strategies to stay ahead in the competitive world of forex trading.

Legal Documents 

Ultima Markets, a trading name of Ultima Markets Ltd, is authorized and regulated by the Financial Services Commission “FSC” of Mauritius as an Investment Dealer (Full-Service Dealer, excluding Underwriting) (license No. GB 23201593). The registered office address: 2nd Floor, The Catalyst, 40 Silicon Avenue, Ebene Cybercity, 72201, Mauritius. 

Disclaimer

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.

Copyright © 2023 Ultima Markets Ltd. All rights reserved.