USD Gains While High Number Of Earnings Releases Expected

Oct 26 21, 09:06 GMT

The USD tended to gain against a number of its counterparts yesterday, yet market attention is expected to be turned towards today’s financial releases as we get the US consumer confidence for October as well as the new home sales figure for September. US stockmarkets gained yesterday with market focus remaining on the earnings reports by various companies and it should be noted that all three main US Stockmarkets indexes were in the greens with Dow Jones and S&P 500 reaching new record highs. Today we note the earnings reports of Microsoft (#MSFT), Alphabet (#GOOG), 3M (#MMM), General Electric (#GE) and Twitter (#TWTR) among others thus providing ample of opportunities for traders. Oil traders may be more interested on the release of the weekly API crude oil inventories figure, due out just before Wednesday’s Asian session starts and should another considerable buildup of inventories be reported we may see oil bulls being tamed somewhat, as it would imply a slack in the US oil market.

The USD index jumped yesterday breaking the 93.70 (S1) resistance line, now turned to support. As the index in its upward movement also broke the downward trendline guiding it since the 13th of October, we switch our bearish outlook in favor of a bias for a sideways movement initially, albeit we must note the index’s bullish tendencies. The RSI indicator below our 4-hour chart is above the reading of 50, which could also imply a slight advantage for buyers. Should the bulls actually take charge, we may see it breaking the 94.10 (R1) resistance line thus paving the way for the 94.60 (R2) level. Should the bears take over, we may see the index reversing course, breaking the 93.70 (S1) support line and aim for the 93.20 (S2) level.

Facebook to be more than a social media company

On other news Facebook’s share price rose yesterday while the company has reported better than expected earnings for Q3, despite its revenue being lower than expected by analysts. It seems that its classic revenue stemming from ads may be facing “significant uncertainty” as Apple Inc’s new privacy changes could weigh.

It should be noted that Facebook has been under the scrutiny of media and has received considerable bad press lately due to a leak made by a former employee and the documents seem to show that the company has prioritised profits over the safety of its users. Also, the company is reported to be aiming towards a fundamental shift as it invests billions in advancing its transformation from a social media company to something larger with its augmented reality program being on the front line. We intend to keep a close eye over the share’s price leaning currently more on the optimistic side yet should the negative headlines continue to emerge we may see it retreating once again.

Facebook’s share price rose yesterday testing the 329.15 (R1) resistance line. For our bias for a sideways motion to change in favor of a bullish outlook we would require a clear breaking of the prementioned level. Please note that the RSI indicator below our 4-hour chart is below the reading of 50 which could imply a bearish sentiment, yet the indicator seems to be slowly rising. If a buying interest be displayed for the share, its price may break the 329.15 (R1) resistance line which capped yesterday’s upward movement and aim for the 338.00 (R2) resistance level. To the downside should the markets prefer to sell the company’s share, we note the 322.50 (S1) support line, while lower than that we note the 315.70 (S2) level.

Today’s events and expectations

Today we note the release of UK’s CBI distributive trades for October and in the American session, the US consumer confidence for October as well as the New Home sales figure for September, while just before the Asian session starts, we get the API weekly crude oil inventories figure. During tomorrow’s Asian session we get New Zealand’s trade data for September and Australia’s CPI rates for Q3.

US Index H4 Chart