US stocks rose yesterday as traders cheered great results from Netflix and Morgan Stanley. Netflix rose by almost 10% with revenue coming in at $5.24 billion and a per share value of $1.47. Morgan Stanley’s revenue rose to more than $10.1 billion while its profit rose by 2.3% to $2.17 billion. IBM reported weak earnings. Later today, the market will receive earnings from companies like American Express, Coca-Cola, and Synchrony Financial.
Chinese stocks declined today as traders reacted to the country’s GDP numbers for the third quarter. Data from the Chinese statistics office showed that the economy grew by 6.0% in the third quarter. This was significantly lower than the consensus estimates of 6.1%. The economy had grown by 6.3% in the second quarter. The Chinese economy has been on a steady decline. In the fourth quarter of 2010, the economy was growing at almost 10%. YTD, the Chinese economy has grown by 6.2%. Meanwhile, fixed asset investment increased by 5.4% while industrial production remained unchanged at 5.6%. Retail sales increased from 7.5% to 7.8% while the unemployment rate remained unchanged at 5.2%. China’s economy is the most important in the world. This is because the country is the biggest importer and exporter.
The market will today focus on Brexit. Yesterday, Boris Johnson announced that the two sides had reached a deal. Shortly afterward, the deal was passed by European Union leaders. The new deal will see Northern Ireland remain part of the UK’s customs union and would be the entry point into EU’s single market. There will be no regulatory or customs check between Northern Ireland and the Republic of Ireland. Furthermore, the deal will cover the protection of citizens’ rights. If the deal is accepted, the two sides will now start working on an ambitious free trade agreement. Still, the crucial DUP party has threatened to reject the deal.
EUR/USD
EUR/USD pair remained at elevated levels following positive Brexit news. The pair is now trading at 1.1125, which is close to the highest level since August 26. On the daily chart, this price was slightly above the 23.6% Fibonacci Retracement level while the 14-day and 28-day EMAs have made a bullish crossover. The RSI too has been moving higher. Therefore, the pair might continue moving higher to test the 38.2% Fibonacci level of 1.1230.
GBP/USD
The GBP/USD pair is trading at 1.2850, which is slightly below yesterday’s high of 1.2985. On the daily chart, this price is along the 61.8% Fibonacci Retracement level. It is also below the 14-day and 28-day moving averages while the RSI remains above the overbought level of 70. The average directional movement index has continued to move up. The pair may continue being volatile as the market waits on the Brexit announcement.
AUD/NZD
The AUD/USD pair was relatively unchanged after China released the GDP number for the third quarter. As of this writing, the pair is trading at 1.0725, which is much lower than the weekly high of 1.0793. On the hourly chart, this price is slightly below the 14-day and 28-day moving averages. It is slightly below the 50% Fibonacci Retracement level. The pair may remain in this holding pattern as the market receives more information on Brexit. If it moves lower, it will likely test the 23.6% Fibonacci level of 1.0700.
