MAJORS RISE AHEAD OF UK JOBS AND EU INFLATION DATA
US stocks rallied for the second straight day as the earnings season continued. The Dow Jones and S&P 500 rose by more than 0.50% even as more American companies warned about their growth outlook. Goldman Sachs said that its profit plunged by more than 40% in the second quarter as deal-making slowed. The profit was better than expected as the company’s trading desk saw a 32% increase in quarterly results. Bank of America’s earnings were cushioned by consumer spending as fee revenue dropped by 47%. The earnings season will continue Tuesday, with companies like JB Hunt Transport, Interactive Brokers, Aspen Group, and Hasbro expected to report.
The US dollar index retreated slightly as investors waited for the latest housing data from the United States. Economists expect the data to show that the country’s building permits dropped from 1.695 million in May to about 1.650 in June of this year. On the other hand, they see housing starts rising from 1.549 million in May to 1.58 million. These numbers will come a day after a separate report revealed that homebuilder sentiment plunged in June. According to the National Association of Home Builders, sentiment crashed by 12 points to 55. That was the biggest single-month drop in its 37-year history.
The British pound and the euro rose slightly ahead of key economic numbers from the UK and Eurozone. In the UK, the Office of National Statistics (ONS) will publish the latest jobs numbers. Economists expect that the country’s labor market remained tight in May. The previous data showed that the country’s unemployment rate dropped to 3.8% while the number of people filing for jobless claims continued falling. Elsewhere, Eurostat will publish the latest Eurozone consumer inflation data for June. Analysts expect these numbers to reveal that the country’s inflation rose by 8.6%. The readings will come two days before the latest interest rate decision by the European Central Bank (ECB).
XBRUSD
The XBRUSD pair continued rising as investors cheer the outcome of last week’s meeting between MBS and Joe Biden. The pair rose to a high of 102.50, which was the highest level since July 12. The pair managed to move above the 25-day and 50-day moving averages while the MACD has moved above the neutral point. It has also formed a hammer pattern, which is usually a bullish sign. There is a likelihood that the pair will keep rising as bulls target the key resistance at 105.
EURUSD
The EURUSD pair continued its recovery ahead of the latest EU inflation and ECB decision. It rose to a high of 1.0200, which was the highest point in over a month. It has risen above the 25-day moving average while the Relative Strength Index (RSI) and the Stochastic Oscillator have continued rising. The pair will likely keep rising as investors target the key resistance at 1.0250.
EURJPY
The EURJPY pair rose to a high of 140.47, which was the highest level since July 7. The pair managed to move above the key resistance level at 139.82, which was the lowest level since July 6. It rose above the 25-day moving average while the Relative Strength Index (RSI) and the Average Directional Index (RSI) are rising. The pair will likely keep rising as bulls target the key resistance at 142.
