DOW JONES FUTURES PULLS BACK AHEAD OF KEY S&P 500 EARNINGS

American futures retreated slightly as investors waited for more earnings as the season continues. Data compiled by Factset showed that 21% of all companies in the S&P 500 have already published their quarterly results. Of these companies, 68% of them have published a positive EPS surprise while 65% of them have published a revenue surprise. Their blended earnings growth rate has been about 4.8%, which was the lowest level since 2020. The companies have a forward 12-month PE of 16.7, which is lower than the 5-year average of 18.6.

More American companies will publish their results this week. Some of the most notable ones are PulteGroup, Coca-Cola, Raytheon, UPS, Archer-Daniels-Midland, 3M, Google, and Chubb. In Europe, companies like Lloyds Bank, Barclays, and UBS will publish their results this week. Most of these companies are expected to publish weak results and warn about their forward guidance due to the soaring inflation. Still, most investors believe that the worst is now over for companies considering that commodity prices and ocean shipping costs have retreated.

The economic calendar will have no major economic data on Monday. The most important numbers to watch will be German business expectations and current assessment. With energy costs soaring, analysts expect the data to show that sentiment worsened in July. Germany is facing the possibility of gas rationing as Russia considers blocking gas flows to the region. Germany receives more than 40% of its gas from Russia. The UK will publish the latest industrial trends order numbers.

GBPUSD 

The GBPUSD pair moved sideways after the latest weak UK retail sales data. It is trading at 1.200, which is slightly below last week’s high of 1.2063. It has moved slightly above the 25-day moving average and is between the important support level at 1.1935. The Relative Strength Index (RSI) has continued dropping while the price is above the descending trendline shown in green. Therefore, the pair will likely remain in this range ahead of the upcoming US consumer confidence and Fed interest rate decision.

EURUSD

The EURUSD pair was in a tight range on Monday morning as investors waited for upcoming Germany and US confidence data. The pair is also waiting for the upcoming interest rate decision by the Federal Reserve. It is trading at 1.02100, which is slightly below this week’s high of 1.0281 and is also along the 25-day moving average. At the same time, the Average Directional Index (ADX) has been in a downward trend, signaling that there is no trend. Therefore, the pair will likely resume the bearish trend as sellers target the key support at 1.0100.

EURCHF

The EURCHF continued dropping even after the hawkish ECB decision. The pair dropped to a low of 0.9800, which was the lowest level since July 12. It has moved below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) is approaching the oversold level at 30. The Stochastic Oscillator has moved below the oversold level. Therefore, the pair will likely continue falling as sellers target the key support at 0.9750.