US futures struggle for direction after mixed corporate earnings
European stocks were flat as markets waited for important information on Brexit. Reports by the Financial Times and other media sources said that European leaders had agreed to give the UK another extension. This is the third extension this year. European leaders did not agree on the duration of the extension. Still, there are indications that the extension will be a bit short because they don’t want the current uncertainty to go on for too much longer. The report came a few days after the UK parliament voted in support of the deal reached between the UK and EU. They, however, introduced a resolution to slow down the timetable. Therefore, the duration offered by the EU will be important because it will give indications of what parliament could do. Meanwhile, Boris Johnson has called for an election that will be held on December 12.
The euro rose today after the IFO released its survey data. In October, the business climate remained unchanged at 94.6. This was slightly better than the consensus estimates of 94.5. The current assessment for October was 97.8, which was below the consensus estimates of 98 and lower than September’s 98.6. Business expectations increased to 91.5 from the previous 90.9. The current assessment is a survey number used to measure business conditions at the moment. Business expectations measures management expectations for the following six months. These numbers came a day after the European Central Bank (ECB) left interest rates unchanged and pledged to do more to bring inflation towards the 2.0% target.
Nasdaq futures rose even as the markets reflected on the weak earnings from Amazon. The company caught Wall Street off-guard yesterday when it reported weak earnings. The company reported a sharp increase in revenue but only $2.1 billion in profit. This happened as the technology darling increased its investments in logistics. These investments will help it improve its same day delivery service. The results took investors to 2017 when the company started focusing on profitability. Before then, Amazon was more focused on growth, which saw it make increased losses.
Nasdaq rose slightly as markets continued to reflect on past earnings while focusing on earnings expected in the coming week. Futures are trading at $7933, which is significantly higher than this week’s low of $7801. On the hourly chart, the price is along the 14-day and 28-day moving averages while the RSI has remained unchanged at 54. The signal and histogram of MACD were also unchanged. The index may continue moving higher ahead of next week’s earnings from Apple, Google, and Facebook.
EUR/USD pair moved up slightly as the market received encouraging survey data from Germany. The pair is trading at 1.1111, which is slightly higher than the weekly low of 1.1090. On the hourly chart, the price is also above the 61.8% Fibonacci Retracement level. The pair saw little volatility as evidenced by the moving averages and ATR indicator below. With no major economic data expected later today, there is a possibility that the pair will remain in this holding pattern through the American session.
NZD/USD pair declined today. This was a continuation of the downward trend that started on Monday when the pair was trading at 0.6435. On the hourly chart, this price is below the 14-day and 28-day moving averages. It is also along the 61.8% Fibonacci Retracement level. The RSI is approaching the oversold level of 30 while the signal line of MACD is below the neutral line. The pair may pause in the American session as traders wait for more data from the US and New Zealand in the coming week.