US futures soar ahead of earnings extravaganza
US stock futures rose today as the market looked ahead to a busy week. This week, many companies in the S&P 500 will release their earnings. Some of these companies include Boeing, Chipotle, Microsoft, Halliburton, and Proctor & Gamble. Dow futures rose by 40 points while the S&P futures rose by 10 points. Dow was dragged by Boeing, which is again in the spotlight after a report on how it handled 737-Max was released over the weekend. The report said that one of the company’s pilots had warned about trouble with the MCAS system in 2016. This was two years before the first accident in Indonesia. This report came as the company and the FAA are under increased scrutiny by regulators and congress.
Sterling rose today as traders digested the decision by Commons to let Boris Johnson ask for another extension. The amendment by Oliver Letwin, a former conservative, forced the prime minister to request an additional three-month extension. Johnson wrote a defiant and unsigned letter to the EU asking for an extension. He also sent another letter making the case against extension. Johnson is expected to push the vote today or tomorrow and analysts expect him to get the votes he needs. A three-month extension would prevent the country from crashing out of the European Union. However, it would also lead to a continuation of uncertainty that has been ongoing throughout the year. Many companies are afraid of investing in the country because they are not sure about its relationship with the EU.
The euro was relatively unchanged after the German central bank released its monthly report. The report warned that the country’s economy may have shrunk for the second consecutive quarter. This would mean that the biggest EU economy is in its first recession in 6 years. The economy declined by -0.1% in the second quarter of the year. The third quarter data will be released on November 14. The country is facing a multitude of challenges. Brexit is a major challenge because it has added uncertainties in the region. The automobile industry is facing challenges as companies try to adapt to the new emission standards. The ongoing trade war has led to significant impacts on the economy as well. This is because the German economy is mostly dependent on international trade.
The EUR/USD pair was relatively unchanged even after Bundesbank warned about recession risks. As of writing, the pair is trading at 1.1168, which is slightly above the important resistance level of 1.1163. On the four-hour chart, the price is above the 14-day and 28-day moving averages while the RSI has remained above the overbought level. The momentum indicator has eased. While the pair may continue moving upwards, there is a possibility of a pullback ahead of the ECB decision later this week.
GBP/USD pair continued the upward trend started a few weeks ago. Today, the pair reached a high of 1.3010, which was the highest level since May this year. On the daily chart, this price is above the 61.8% Fibonacci Retracement level. The price is above the 14-day and 28-day moving averages while the RSI has remained above the overbought level. The same is true with the MACD, which has continued to soar. The pair may see some volatility as traders wait for more information on Brexit.
The AUD/USD pair rose sharply today, continuing a momentum that started on October 1 when the pair was trading at 0.6669. Today, the pair reached a high of 0.6880. On the four-hour chart, the price is above the 14-day and 28-day moving averages while the RSI has moved to the overbought territory. The price is 20 pips below the important resistance level. The Parabolic SAR dots are below the pair. There is a possibility that the pair will continue the upward trend.