US stocks rose sharply on Friday and in the futures market as investors focused on the ongoing earnings season. The Dow Jones, S&P 500, and Nasdaq 100 indices rose by more than 1% even as many companies warned about their profit margins. Some of the firms that warned about inflation are JP Morgan, Fastenal, and Delta Air Lines. According to FactSet, 7% of companies in the S&P 500 index have already published their Q2 reports. 60% of them have beaten analysts’ expectations. Some of the top companies that will publish their results this week are IBM, Goldman Sachs, and Bank of America.
The price of crude oil rose slightly as investors reacted to the recent meeting between Joe Biden and Mohammed Salman of Saudi Arabia. According to Bloomberg, Saudi Arabia did not commit to increase production in a bid to lower prices. Instead, the kingdom committed to the strategy set by the OPEC+ cartel. In its most recent meeting, the cartel increased its supply increase quota by 643k barrels per day. Still, there are concerns about the refinery capacity of some countries.
The New Zealand dollar rose slightly after the latest consumer inflation data from the country. The data revealed that the headline consumer inflation rose from 6.9% in the first quarter to 7.2% in Q2. That was the highest increase in decades and was mostly caused by the soaring energy prices. The data came a few days after the Reserve Bank of New Zealand (RBNZ) decided to hike by 50 basis points. Looking ahead, the next key economic events to watch will be the latest monthly report by the German Central Bank.
NZDUSD
The NZDUSD pair continued its recovery as investors reacted to the latest New Zealand inflation data. It rose to a high of 0.6172, which was the highest point since July 12th of this year. It moved above the descending channel shown in green. It has risen above the 25-day and 50-day moving averages while the MACD and the Relative Vigor Index (RVI) rose. It has also formed a small doji pattern. Therefore, the pair will likely start a bearish trend as sellers target the support at 0.6100.
EURUSD
The EURUSD pair rose slightly on Monday morning as the dollar strength calmed. It is trading at 1.0084, slightly above last week’s low of 0.9950. The pair has moved slightly above the 25-day moving average. The Stochastic Oscillator has moved above the overbought level while the Relative Strength Index (RSI) has continued rising. The pair will likely keep rising as bulls target the key resistance at 1.0150.
XAUUSD
The XAUUSD pair moved sideways on Monday morning. It is trading at 1,707, which was the lowest level in more than a year. On the four-hour chart, the pair is between the lower and midline line of the Bollinger Bands. The Stochastic Oscillator has moved to the neutral point while the Relative Strength Index (RSI) has moved slightly above the oversold level. Therefore, the pair will likely keep falling as bears target the support at 1650.
