Global stocks fall as weak corporate earnings converge with oil volatility
April 22, 2020
Posted by: Analysis Team
Category: FOREX, Technical Analysis
US stocks declined yesterday as investors reacted to weak corporate earnings and falling oil prices. The Dow Jones lost 600 points, bringing its two-day drop to 1,200. This drop was due to weakness in energy stocks like ExxonMobil and Chevron, which have lost the billions worth of value this year. Weak earnings and guidance from IBM, Coca-Cola, Goldman Sachs, and JP Morgan also contributed to the decline. Today, the focus will remain on corporate earnings and low oil prices since companies like AT&T, Delta, Kimberley-Clark, Kinder Morgan, and Tesla will release their earnings.
The British pound was relatively unchanged in the Asian session as traders waited for key inflation numbers from the Office of National Statistics (ONS). Economists polled by Dow Jones expect the headline annual inflation rate to rise to 1.8% from the previous 1.7%. They expect it to fall slightly from the previous 0.4% to 0.3% on a monthly basis. They expect the core CPI to decline from 1.7% to 1.6%. They also expect the retail price index to fall from 2.5% to 2.3%. These numbers will come at a time when the UK is still negotiating a Brexit deal with the European Union.
The Canadian dollar declined in overnight trading as focus remained on the price of crude oil, which has continued being volatile. Today, the market will receive the March inflation numbers. Analysts expect the headline CPI to decline from the previous 2.2% to 1.2%. They expect it to contract by 0.4% down from the previous 0.4%. These numbers will come at a time when the country is also fighting with the coronavirus pandemic since the number of confirmed cases is rising.
The EUR/USD pair was little changed even after the disappointing US housing data yesterday. The pair is trading at 1.0850, which is significantly higher than yesterday’s low of 1.0815. The price has also remained stuck at the 50-day and 25-day exponential moving averages while the signal and histogram of the MACD are around the centreline. The pair could remain in a holding pattern today as there is no significant scheduled economic data.
The XBR/USD pair declined in overnight trading as problems in the energy sector continued. The pair is trading at 22.52, which is slightly above yesterday’s low of 20.95. The pair is trading below the 50-day and 25-day exponential moving average while the RSI has moved to the oversold level on the four-hour chart. The pair has also formed a bullish Doji candlestick pattern. Therefore, there is a likelihood that the pair may move higher as buyers start coming in.
The USD/CAD pair rose to an intraday high of 1.4200 ahead of the important inflation numbers. The price is slightly below yesterday’s high of 1.4267, which is along the 50% Fibonacci Retracement level. The price is also slightly above the short and medium-term moving averages while the RSI has remained stuck below 70. The pair may continue rising ahead of the Canadian inflation data.