US stocks rose yesterday as the market reacted to positive earnings from JP Morgan. The biggest bank in the US had a profit of more than $9.08 billion on revenues of $29.34 billion. This was the seventh straight month of profit increases. Meanwhile, Goldman Sachs saw its profit decline by 26% on low levels of deal-making. The bank is attempting to target retail customers with the recent launches of Marcus and Apple Card. Blackrock, the biggest money manager in the world increased its assets under management in the quarter. Today, the market will receive additional earnings from companies like Bank of America, Netflix, and IBM.
Sterling. Sterling rose against its peers after reports of a deal between the UK and the European Union. The two sides are negotiating on how the UK will exit the European Union. A breakthrough will be a good thing for Boris Johnson and the market. If a deal is reached, there is a likelihood that it will be announced today. Sources told the media that a deal hinged on Johnson having the required votes in parliament. Previously, Theresa May’s deal failed to get enough backing from the house of commons.
EUR/GBP. The EUR/GBP pair declined to a low of 0.8623. This was the lowest level since May this year. On the daily chart, the price is slightly below the 23.6% Fibonacci Retracement level. It is also below the short, medium, and long-term moving averages. The average true range has soared while the RSI has moved to below the oversold level of 30. Today, the pair may see some volatility as traders react to news from Brussels and London.
New Zealand dollar. Kiwi declined today after Statistics New Zealand released consumer price data for September. These numbers showed that consumer prices increased by an annualized rate of 1.5%. This was slightly higher than the consensus estimates of 1.4%. The increase was driven by a surge in rental prices and tobacco. It was offset by decreasing prices of vegetables and petrol. On a QoQ basis, the CPI remained unchanged at 0.6%. These numbers came a few weeks after the RBNZ slashed interest rates by 25 basis points.
The AUD/NZD rose sharply in reaction to New Zealand’s CPI data. The pair rose from a low of 1.0683 to a high of 1.0735. On the hourly chart, the price is along the 50% Fibonacci Retracement level. It is also below the previous support shown in blue below. It is also between the middle and lower lines of the Bollinger Bands. The ATR has increased sharply, which is a sign of increased volatility. The bullish harami candlestick pattern formed may be an indication that the pair’s price will continue to rise.
US dollar. The US dollar index declined after IMF warned that the world economy will likely slow because of the ongoing trade war. Later today, the dollar may move in reaction to news on Brexit, US retail sales, Canadian CPI, and EU CPI. Data from the US is expected to show that retail sales declined slightly from 0.4% to 0.3%, while core retail sales are expected to have increased slightly to 0.2%. In Canada, the headline CPI data is projected to have increased slightly from 1.9% to 2.0% and the core CPI is expected to have remained unchanged at 1.9%. Meanwhile, economists polled by Reuters are forecasting the headline CPI to have declined from 1.0% to 0.9%.
AUD/USD. The AUD/USD pair declined to a low of 0.6725. On the hourly chart, this price is between the 50% and 38.2% Fibonacci Retracement level. It is also below the 28-day and 14-day moving averages while the RSI has reached the oversold level of 30. The pair may continue moving lower to test the previous support of 0.6700.
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