It will be an important day for the financial markets as the earnings season for the United States is set to start. Later today, the market will receive the third quarter earnings from the big banks and several other important companies. The key banks that will release their earnings will be JP Morgan, Citi, Wells Fargo, and Goldman Sachs. These earnings are watched closely on Wall Street because they tend to set the tone of the earnings season. Other major companies will release their earnings too. These include the likes of Charles Schwab, Blackrock, Johnson & Johnson, Interactive Brokers, and UnitedHealth. These numbers will come a day after Wall Street started to question the partial agreement made between the United States and China.
US30. Dow futures rose slightly during the Asian session. As of writing, the index is trading at $26,847, which is slightly higher than yesterday’s low of $26682. On the hourly chart, the index is along the 14-day and 28-day moving averages. The RSI has remained unchanged at the neutral level of 54. Today, the index may move sharply in either direction depending on the earnings results.
Aussie. The Australian dollar was relatively unchanged after the RBA released the minutes of the meeting held earlier this month. In the minutes, the bank continued to express its fears about the global economy at a time when tensions are rising. The bank projected optimism for the Australian economy, partly due to the previous rate cuts it has done in the past few months. In the meeting, the bank made another 25-basis point cut. In the minutes, the bank said:
Members judged that lower interest rates would help reduce spare capacity in the economy by supporting employment and income growth and providing greater confidence that inflation would be consistent with the medium-term target. Members also noted the trend to lower interest rates globally and the effect this was having on the Australian economy and inflation outcomes.
AUD/USD. The AUD/USD pair was relatively unchanged today after the bank released the minutes of the previous meeting. As of writing, the pair is trading at 0.6750, which is higher than yesterday’s low of 0.6750 and lower than last week’s high of 0.6810. On the hourly chart below, this price is above the 61.8% Fibonacci Retracement level. It is also between the middle and upper line of the Bollinger Bands. The RSI remains along the neutral level of 50. At this point, the key levels to watch will be the previous high of 0.6810 and the previous low of 0.6750.
Sterling. The sterling was relatively unchanged in overnight trading. It still remains at elevated levels compared to where it was a week ago. The ease of momentum is because hopes that a deal between the European Union and the UK are still low. Yesterday, sources involved with the negotiations in Brussels said that the probability of a deal being sealed before October 19 is still low. This is because of the significant differences between the European Union and the UK over Northern Ireland. While the EU wants a backstop to prevent a hard border, the UK has resisted any measure that will leave any part of the UK in the EU customs union. Also, there is the challenge about whether the UK parliament, with its divisions, will be able to pass any deal that is negotiated by Boris Johnson.
EUR/GBP. Last week, the EUR/GBP pair declined to a low of 0.8693. Today, the pair is trading at 0.8745, which is between the 23.6% and 38.2% Fibonacci Retracement level on the daily chart. The price is below the 14-day and 28-day moving averages while the RSI has made a sharp decline. The same is true with the Stochastic oscillator. While the pair could continue moving lower, there is a possibility that it will be a bit volatile as the Brexit debate continues.
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