American stocks rose on Wednesday as the earnings season continued. The Dow Jones index rose by 326 points while the Nasdaq 100 and S&P 500 rose by more than 1%. Companies that performed well were Microsoft, Visa, and Mastercard. Microsoft published strong earnings, helped by cloud computing. Visa, on the other hand, reported strong results as the travel industry rebounded. Spotify shares crashed by more than 10% even after the company’s business did well. Other top laggards were Boeing, Roku, Netflix, and Warner Bros Discovery.
The US dollar index continued rallying as global risks continued to escalate. Russia has already stopped supplying natural gas to Bulgaria and Poland and there are signs that it will end its supplies to other countries in Europe. Therefore, analysts expect that central banks like the ECB will be more cautious when it comes to hiking interest rates. Another risk is that the Covid-19 lockdowns are continuing in China. The key data to watch today will be the latest American GDP data. Economists expect the numbers to show that the American economy did well in the first quarter as the reopening process continued.
The economic calendar will have several important events on Thursday. Earlier on, the Bank of Japan delivered its interest rate decision. As was expected, the bank decided to leave its interest rate unchanged. It also hinted that it would intervene in the coming months as consumer inflation starts rising. In Europe, the European Commission will publish the latest consumer and industrial sentiment data. Economists expect these numbers will show that confidence declined in April as the cost of doing business rose. The other important data to watch will be the American consumer initial jobless claims and German inflation numbers.
EURUSD
The EURUSD pair is hovering near its lowest level since 2017 as risks for the European economy continued. The Average Directional Index rose to a high of 46, which is a sign that the bearish trend is strong. The Stochastic oscillator and the Relative Strength Index have tilted upwards on the three-hour chart. It has also moved below the dots of the parabolic SAR and the 25-day moving average. The pair will likely keep falling today.
USDMXN
The USD/MXN pair continued rising as the strength of the US dollar continued. It rose to a high of 20.51, which was the highest level since March 21st. It has moved above the 25-day and 50-day moving averages. It has also moved to the 50% Fibonacci retracement level while the MACD has moved above the neutral level. The pair will likely keep rising as bulls target the key resistance at 20.60.
EURCAD
The EURCAD pair dropped to a low of 1.3536, which was the lowest point in years. The pair’s downward trend is supported by the 25-day and 50-day moving average. It also moved below the important support at 1.4163. It has also formed a falling wedge pattern that is shown in red. Therefore, while the downward trend may continue, there is a possibility that it will bounce back soon.
