US futures rise as traders cheer positive US quarterly earnings
US futures rose as the earnings season started. Shares of JP Morgan rose by 1% after the bank reported better than expected earnings and revenue. The biggest bank in the US reported a net income of more than $9.1 billion on revenue of $30.1 billion. UnitedHealth reported an EPS of $3.88 on revenue of more than $60.35 billion. Meanwhile, Blackrock, the biggest money manager in the world saw an increase of assets under management. Assets under management reached more than $6.39 trillion. However, profits dropped by 8% on lower fees and higher costs. Dow and S&P500 futures rose by 110 and 10 points respectively.
In Germany, the DAX index rose by 50 points as 26 of its constituent companies saw their share price rise. The biggest gainer was Adidas, which rose by 2%. This followed a decent rally by Nike, which reached an all-time high yesterday. The index was weighed down by Wirecard, whose stock declined by more than 17%. This drop happened after the Financial Times wrote a scathing article on the company saying that it was cooking books. In a statement to Bloomberg, the company vehemently denied the allegations. Late last year, the Financial Times began publishing articles critical of the German payment processor. The company has now sued FT for market manipulation.
The sterling rose today after top EU negotiator, Michel Barnier said that he saw the possibility of a breakthrough in the ongoing talks. In a statement to reporters, Barnier said that teams from both sides were “working hard” to deliver a deal. The message was reassuring at a time when traders have been concerned about the pace of progress. Meanwhile, the unemployment rate in the UK increased to 3.9% from the previous 3.8%. Employment change for the past three months declined by 56k after rising by 31k previously. Claimant claims rose by 21.1k, which was better than the expected 26.5k. Meanwhile, in the European Union, ZEW economic sentiment declined to -23.5 from the previous -22.4.
UR/USD pair declined to a low of 1.0005. This price action was a breakout from the previously-forming symmetrical triangle pattern. On the hourly chart, the price is below the 14-day and 28-day moving averages. The RSI has been on a downward trend and today it reached a low of 36. The key levels to watch later today will be the apex of the triangle at 1.1030. The pair may also continue to move lower in the new trend.
GBP/USD pair reversed the previous declines and rose to a high of 1.2700. The pair is also trading close to last week’s high of 1.2710. On the four-hour chart, this price is above the two lines of the Envelopes indicator. The average true range has soared to the highest level in months. This is an indication that the pair could experience more volatility as traders receive more information on the ongoing talks. If the pair reverses its gains, the potential level to watch will be the 50% Fibonacci Retracement level of 1.2340.
The GER30 index rose to a high of €12855, which is the highest level since July 25. On the four-hour chart, this price is slightly below the upper line of the Bollinger Bands while the RSI has moved slightly above the overbought level of 70. Meanwhile, the Chaikin indicator has been moving lower and is likely headed towards the neutral line. The index may continue to soar in response to positive results from the US.