US stocks rise after strong Procter & Gamble earnings
US futures are rising as traders react to upbeat quarterly results from key companies, mergers and acquisitions, and optimism that Congress and the White House will reach a funding deal. Quarterly results from Procter & Gamble showed that the company’s revenue increased by 9% in the third quarter. Sales of Reckitt-Benckiser also bounced back, which is a sign that consumer spending has returned. Meanwhile, Intel announced that it was selling its NAND business to SK Hynix for $9 billion Also, Pioneer Resources is said to be in talks to acquire Parsley Energy, a shale energy company.
Analysts are also relatively optimistic that the White House will reach a stimulus deal with congress. According to the Wall Street Journal, Nancy Pelosi and Steve Mnuchin have continued to hold talks with the goal of narrowing the gap. The two have proposed a $2.2 trillion and $1.8 trillion deals, respectively. However, even with a deal between the two, there is a likelihood that the deal will not find enough support in the senate. Indeed, many Republicans in the Senate are opposed to a stimulus that goes above $500 billion.
The US dollar declined today mostly because of hopes of a stimulus deal. The currency dropped because a deal would remove a key risk in the market. It also dropped after the US released building permits and housing starts data. The data showed that building permits increased from 1.4 million to 1.55 million. Housing starts rose from 1.38 million in August to 1.41 million in September. These numbers show that the housing industry in the United States is doing relatively well, helped by low interest rates. Elsewhere, in commodities, the price of crude oil was little changed today while gold and silver declined.
The EUR/USD pair rose to an intraday high of 1.1816, which was its highest level since October 12. As it rose, it moved above the bullish flag pattern that was forming yesterday. On the four-hour chart, the price has moved above the 14-day and 28-day exponential moving averages. It is also slightly below this month’s high of 1.1832. The two lines of the Relative Vigour Index (RVI) are also gaining. Therefore, the pair is likely to continue rising as bulls aim for the next resistance level at 1.1832.
The USD/JPY pair rose to an intraday high of 105.66. On the four-hour chart, this price is above the 23.6% Fibonacci retracement level. It is above the 25-day exponential moving averages while the Relative Strength Index (RSI) has risen closer to the overbought level of 70. The force index has also remained above the neutral level of zero. The price is also slightly below this month’s high of 106.11. Therefore, the price is likely to continue rising as bulls aim for this resistance.
The AUD/USD pair declined to the lowest level since September 25 as the RBA minutes showed that the bank was considering more rate cuts. On the four-hour chart, the price is below the 15-day and 25-day exponential moving averages. It has also moved below the 23.6% Fibonacci retracement level. The signal and main lines of the MACD are also below the neutral level. Therefore, the price is likely to continue falling as bears aim for September’s low of 0.7000.