Global stocks mixed as the focus remains on corporate earnings
The Australian dollar was little changed today as traders reacted to the interest rate decision by the RBA. In the decision, the bank left the main lending rate and the three-year target unchanged at 0.25%. The bank also said that it will restart its asset purchases to ensure that the yield of the three-year bonds remains on target. In a statement, governor Philip Lowe said that he expects the economy will contract by 6% this year while the unemployment rate will rise to 10% this year. He expects inflation to remain below the target of 2.0%. The biggest risk for the Australian dollar is that the number of coronavirus cases in Victoria is rising.
The euro was little changed against the US dollar today even after some positive factory-gate price data. According to Eurostat, the producer price index expanded to 0.7% in June from May. That was better than the 0.5% that analysts were expecting. It was also better than the previous decline of 0.7%. On an annualised basis, the headline PPI declined by 3.7%, which was also better than the previous decline of 3.9%. These numbers came a day after Markit released strong manufacturing PMI data from the bloc.
European equities were mixed today as traders reflected on mixed corporate earnings from the region. In Germany, the DAX index declined by more than 0.43% as traders reacted to weak earnings from Bayer, the giant chemical and pharmaceutical company. In the UK, the FTSE 100 rose by 0.35% after BP released results that were better than analysts expected. Later today, we will receive earnings from American companies like Twilio, Monster Beverage, AllState, KKR, and Walt Disney, among others.
The EUR/USD pair is trading at 1.1770, which is slightly higher than yesterday’s low of 1.1700. On the four-hour chart, the price is still above the 50-day and 100-day EMA while the RSI has moved to the neutral level of 50. It is also above the ascending trend line that is shown in white. Therefore, the pair may remain in a holding pattern as traders wait for NFP data from the US.
The GBP/USD pair dropped to the intraday low of 1.3025 from a high of 1.3110. On the four-hour chart, the price is slightly above today’s low of 1.3000. It also seems to be forming a small head and shoulders pattern, which tends to be bearish. The RSI has also moved from a high of 84 to the current level of 50. Therefore, the price may continue falling as bears attempt to move below 1.3000.
While the AUD/USD pair was little changed today, the AUD/NZD jumped by about 0.30% to an intraday high of 1.0810. On the four-hour chart, this price moved above the previous resistance level at 1.0800. Also, it is above the 50-day and 100-day exponential moving averages. The price is also along the upper side of the Bollinger Bands while the Force index has moved above the neutral line. Therefore, the pair may continue rising as bulls target the next resistance at 1.0830.