US stocks staged an impressive comeback rally as traders and investors rushed to buy the dips after days of sharp declines. The Nasdaq 100 rose by more than 2.7%, led by companies like Tesla, Apple, and Microsoft. Still, analysts warn yesterday’s relief rally is unlikely to last as risks between the US and China remain. The upcoming election is also being seen as a potential risk. Indeed, US futures have dropped During the Asian session with the S&P 500 and Dow Jones falling by 0.30% and 0.32%, respectively. Elsewhere, in Asia, stocks have followed Wall Street higher, with the Hang Seng and Nikkei 225 rising by 0.25% and 0.60%.
The euro rose slightly against the US dollar as traders wait for the European Central Bank (ECB) decision that will come out at 11:45 GMT. Analysts expect the bank will leave interest rates and quantitative easing program unchanged. That is because the European economy has already made significant strides after bottoming in April. Recent data like manufacturing, services, and industrial production have been good. However, with inflation still near record lows and with the euro being relatively strong, some analysts see the bank hinting at more support later this year.
The price of crude oil rose slightly in overnight trading after EIA released its short-term energy outlook. In it, the agency lifted its WTI price forecast by 1.3%. It also expects the US will produce more than 11.38 million barrels per day. Later today, the price will react to the weekly inventory data. Analysts expect the data will show that inventories dropped by more than 1.3 million barrels. If this happens, it will be the seventh consecutive week that the inventories have fallen. Separately, other important data to watch today will be the initial jobless claims data from the US and inflation numbers from Sweden and Norway.
EUR/USD
The EUR/USD pair rose from an intraday low of 1.17500 to the current level of 1.1822. On the daily chart, the price has re-entered the previous white ascending channel. But it is also below the short and medium-term moving averages. The RSI has moved from the oversold level of 30 to the present 53. The price is also slightly above the dots of the Parabolic SAR. Therefore, the pair is likely to continue rising as bulls aim to test the resistance at 1.1850.
GBP/USD
The GBP/USD pair rose to an intraday high of 1.3000. On the daily chart, the signal and main line of the MACD have already made a bearish crossover. However, an Elliot wave analysis shows that the pair has completed its fourth wave, meaning that it is likely to continue rising as it enters the bullish fifth wave. Also, it has made a morning star candlestick pattern, which is an indication that the upward trend is likely to continue.
XBR/USD
The XBR/USD pair rose to an intraday high of 40.60 in overnight trading. On the daily chart, the price remains below the 50-day and 100-day moving averages. It has also returned to the 38.2% Fibonacci retracement level. Also, the price is below the rising wedge pattern it had formed previously. Therefore, the price is likely to continue falling as bears target the next support at $38.
