US stocks rally after impressive quarterly earnings
US stocks rose sharply in pre-market trading as investors cheered corporate earnings. Johnson & Johnson beat analysts forecasts boosted by the strong sales of psoriasis, Crohn’s disease and cancer treatments. UnitedHealth reported adjusted profits of $3.73, which was better than expected. It received a major boost from the Optum health information segment. Blackrock earned $6.13 per share, which was higher than the expected $6.13. Bank of America earned $0.70, which was better than the $0.60 that traders were expecting. Later today, investors will receive data from Netflix and IBM. In response to the earnings, Dow and S&P futures rose by 168 and 10 points respectively.
The sterling dropped slightly against the USD after the UK released better-than-expected results. The employment change increased by 179K. This was better than the consensus estimates of more than 173K. At the same time, the unemployment rate remained unchanged at 3.9% while the claimant count change increased by 28.3K. This was worse than the expected 20K. These numbers show that the economy has continued being resilient even with fears of a no-deal Brexit. However, investors are concerned whether employers will continue adding more jobs as uncertainty continues. Meanwhile, in Germany, the current conditions decreased to 5.5 from the previous 11.1.
The AUD/USD pair pared some of the earlier losses. The pair had fallen after the RBA announced that it will consider lowering rates if the unemployment rate increases and if the inflation rate declines. This is because the Australian economy continues to experience slow growth, which has been caused by slow external demand and an ongoing drought. The gains on the AUD are likely because investors believe that Chinese growth has bottomed. It is also likely because the Fed too could cut rates if the US economy continues to weaken.
The AUD/USD pair recovered most of the losses that it made earlier today. The pair has risen from the intraday low of 0.7140 to a high of 0.7170. On the hourly chart below, this price is slightly above the middle line of the Bollinger Bands. The Average True Range (ATR) has jumped as volatility for the pair has increased. The price is also slightly above the 21-day Variable Index Dynamic Average. Looking ahead, the pair is likely to continue being volatile because of the Chinese GDP numbers, which will be released in overnight trading.
The EUR/USD pair was relatively volatile today. The pair ranged between a low of 1.1280 and a high of 1.1315. On the hourly chart, the pair’s price is a few pips below the 50-day and 25-day moving averages. This price is also above the diagonal support shown below and slightly above the 31.8% Fibonacci Retracement level. The volumes have also increased. The pair is likely to resume the upward trend to test the 50% Fibonacci level of 1.1320.
In the past few days, the GBP/USD pair has been characterized by consolidation, which has led to the symmetrical triangular pattern on the hourly chart as shown below. The price has remained slightly lower than the 42 and 21-day Fractal Adaptive Moving Averages. Today, it moved slightly below the 50% Fibonacci Retracement level. Therefore, with the pair reaching the apex of the triangle, there is a likelihood that the price will breakout in the next few days.