US futures decline after weak corporate earnings

The euro trimmed earlier losses even after data from the European Union showed that manufacturing activity was easing. In the EU, the flash manufacturing PMI declined to 46.4 in July from the previous 47.6. The composite PMI, which includes the activity in the services sector declined to 51.5 from the previous 52.2. In Germany, the manufacturing PMI declined to 43.1 from the previous 45 while the composite PMI declined to 51.4. In France, the manufacturing PMI declined to 50 from the previous 51.9. Investors believe that this data could lead to more stimulus from the ECB, which started the monetary policy meeting today.

In the United States, futures declined after mixed results. The biggest disappointment was Boeing, which missed the consensus estimates by a wide margin. The company reported quarterly revenue of $15.8 billion, which was lower than the expected $20.45 billion. The adjusted loss per share was $5.82, which was lower than the expected profit of $1.96. Last week, the company announced that it had taken a $5.6 billion pre-tax hit from the 737 max woes. Caterpillar reported revenue of $14.43 billion, which was lower than the expected $14.42 billion. The EPS was $2.83, which was lower than the expected $3.12. AT&T announced that it had lost almost a million television subscribers in the second quarter. UPS was a bright spot after reporting better-than-expected results. Revenues rose to $18.05 billion, which was higher than the expected $17.97 billion.

The New Zealand dollar pared some of the earlier losses after the country released trade data for the month of June. In the month, exports declined from $5.74 billion to slightly over $5 billion. In the same period, the imports declined from over $5.7 billion to $4.65 billion. This brought the trade surplus to more than $365 million. Meanwhile, in Japan, and Australia, the manufacturing PMI declined to 49.6 and 51.4 respectively. 

EUR/USD

The EUR/USD pair eased slightly even after the release of the PMI data. The pair is now trading at 1.1145, which is above the 14-day and 28-day moving averages on the four-hour chart. The pair’s Relative Strength Index (RSI) remains below the oversold level of 30. The pair is slightly above the lower line of the Bollinger Bands. The pair will likely continue moving lower ahead of the ECB decision tomorrow. If it does, it will likely test the important support level of 1.1115.

GBP/USD

The GBP/USD rose to a high of 1.2522 and then pared some of those gains. It is now trading at 1.2485, which is above the 28-day and 14-day moving averages. The accumulation/distribution indicator continued to rise while the RSI has dropped from the overbought level of 70 to the current of 60. The dots of the Parabolic SAR remain below the current price. The pair could remain volatile as Boris becomes the Prime Minister.

NZD/USD

The NZD/USD pair declined to a low of 0.6690 after the country released trade numbers. The pair then rose slightly. On the four-hour chart, the pair remains above the 28-day and 14-day moving averages. The RSI dropped to a low of 31 and then rose slightly. The money flow index continued to decline. The pair could resume the downward trend and could now, look to test the 0.6630, which is the 61.8% Fibonacci Retracement level.