GLOBAL STOCKS BOUNCE BACK AFTER STRONG CORPORATE EARNINGS
Global stocks rose as risk sentiment in the market improved. In the United States, futures tied to the Dow Jones rose by 400 points while those linked to the Nasdaq 100 index rose by 230 points. Similarly, in Europe, the DAX index rose by 215 points while the FTSE 100 and CAC 40 have risen by more than 1.50%. In the UK, Landsec said that its pre-tax profit rose to 875 million pounds in a sign that the real estate sector is doing well. Other companies that published strong results are Walmart and Home Depot. Meanwhile, Tesla shares declined after Elon Musk put Twitter deal on pause due to fake accounts.
The British pound rose sharply after the relatively strong jobs numbers from the UK. According to the Office of National Statistics (ONS), the country’s unemployment rate declined to the lowest level in more than half a century as the labor market tightened. The unemployment rate declined to 3.7% in the three months to March. The number of people unemployed between 6 and 12 months declined to its record low. Further, average earnings without bonuses increased to 4.2% while with bonuses increased to 7%.
The euro made a strong bullish breakout after the strong GDP numbers from the bloc. According to Eurostat, the bloc’s economy expanded from 0.2% in the fourth quarter to 0.3% in Q1. This increase was better than the median estimate of 0.2%. It then translated to a year-on-year increase of 5.1%. Further data revealed that the employment change rose from 2.1% to 2.6%. The euro will react to a statement by Christine Lagarde on monetary policy.
EURUSD
The EURUSD pair rose to a high of 1.0525, which was the highest level since May 12th. The pair managed to invalidate the bearish flag pattern. It also rose above the upper side of the Bollinger Bands. The pair also rose above the 25-day moving average while the Relative Strength Index (RSI) has moved close to the overbought level. The pair will likely keep rising as bulls target the key resistance at 1.0582.
GBPUSD
The GBPUSD pair rose to a high of 1.2470, which was the highest level since May 5th. As it rose the pair managed to move above the 25-day moving average. The Stochastic Oscillator continued rising above the overbought level. The Relative Strength Index (RSI) has moved close to the overbought level of 72. It has moved slightly above the descending trendline that is shown in blue. The pair will likely keep rising as bulls target the resistance level at 1.2600.
XNGUSD
The XNGUSD pair rose to a high of 8.35, which was the highest level since May 6th. The pair moved above the important resistance at 8.20. It has moved above the 25-day moving average while the MACD has moved above the neutral level. The DeMarker indicator has moved close to the overbought level. Therefore, the natural gas price will likely keep rising as bulls target the resistance at 8.65.
