To start the US session , the USDJPY is the biggest movers as it bounced back to the upside extending back above technical levels in the process. The pair is up 0.66% to start the US trading session.
Yields are moving higher helping the pair with the 10 year up about 4.5 basis points at 4.421%. The two year yield is up 2.8 basis points at 4.2996%
The dollar is higher vs all the major currencies with gains of 0.47% vs the NZD, 0.35% vs the AUD and 0.33% vs the EUR also contributing to the gains.
US stocks are looking to move higher despite Target getting hit hard after earnings disappointed this morning. The Dow futures are implying a gain of 143 point (retracing the -120 point decline yesterday). The S&P is up after rising 33.36 points yesterday. The Nasdaq is up 50 points after rising 195 points or 1.04% yesterday.
Arguably the most important event today will be Nvidia’s earnings after the close.
Earnings Expectations
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Adjusted quarterly earnings: $0.74 per share versus $0.40 last year (85% YoY increase)
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Revenue: $33.2 billion versus $18.12 billion last year (84% YoY increase)
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Fiscal Q4 sales guidance: $37.7 billion (KeyBanc estimate, down from $40 billion)
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Fiscal Q4 earnings outlook: $0.83 per share (KeyBanc estimate, down from $0.88 per share)
In other markets:
- Crude oil is up $0.56 or 0.79% at $69.78
- Gold is up three dollars or 0.12% at $2635.20
- Bitcoin is up around $1400 or 1.6% at $93,899. Yesterday a new all time high was reached at $94,057
Fed speak today will include:
- FOMC Gov. Michael Barr 10 AM ET. Barr is the vice chair and in charge of supervision
- FOMC Gov. Lisa Cook will be speaking at 11 AM ET
- FOMC Gov. Michelle Bowman will speak at 12:15 PM ET
Crude oil inventory data for the current week will be released at 10:30 AM ET. The private data showed:
The expectations are looking for:
- Crude oil +0.138M
- Gasoline +0.859M
- Distillates -0.020M
Looking at the technicals leading some of the major currency
EURUSD: The week is halfway over and the EURUSD is mired in a up and down trading range with the price remaining below a swing area above between 1.0592 to 1.0610 and a swing area below between 1.0515 and 1.05316. That is a 95 pip range which is not a lot, but it does come after a move down from 1.1213 to 1.04956 over the course of 6-7 weeks (since September 26). So it is not surprising.
Drilling to the hourly chart, the high price this week did find willing sellers ahead of the 200 hour MA (green line). Today, the price fell below the 100-hour MA at 1.0562 tilting the bias more to the downside. The door is open to test the swing areas.
USDJPY: The USDJPY moved down to test the broken 61.8% of the moved down from the July high to the low reached in September at 153.397. The price moved to a low yesterday of 153.27 so the sellers had their shot. They missed. The price snapped back higher and in trading today has extended back up and broke a swing area between 154.54 and 155.21. That area is now close risk for buyers and sellers today. Stay above is more bullish.
Drilling to its hourly chart below, the price rise yesterday moved above the 200 hour MA in the US afternoon yesterday and stayed above it today. That gave the buyers the go ahead to push higher. After breaking the 100 hour MA, buyers were encouraged to take the price even higher. The price trades at the highs going into the US session.
US yields are higher and near highs for the day which is a tailwind. 2 year is up 3.4 basis points at 4.306%. The 10 year is up 4.9 basis points at 4.427%.
GBPUSD: The GBPUSD extended higher in trading today, advancing above a swing area between 1.2654 to 1.26858 (bullish). The momentum took the price to a high of 1.27138 which was near a swing low from last week and then a corrective swing high (from last week as well – see red numbered circles). The price fell short of the broken 61.8% retracement level at 1.27322. Buyers turned to sellers and has now pushed the price back to the aforementioned swing area and tests the low of that level at 1.2654.
Move below 1.2654 and the traders start to look back toward the lower swing area 1.2596 to 1.26137 (see the lower yellow area). Go for it would take a move below that level to open the door for further selling momentum with lows from May the next targets on the downside.
USDCHF: The USDCHF moved lower yesterday, and in the process retested the 50% midpoint of the move down from the May 1 high. That midpoint level comes in at 0.87986. The low price from yesterday reached 0.8800 (also a nice natural support target). In the process, the price fell below its 200-day moving average and swing area near 0.8819 and 0.8826, but both those levels were rebroken and the price has extended higher in trading today. Sellers made an effort, but they could not stay below the 200 day moving average nor break back below the 50% midpoint. So buyers keep most of the control.
Going for the price will need to stay above the 200 day moving average to keep that control. On the top side there is resistance at a swing area between 0.8880 and 0.8900. Last week the price did extend above that area, but failed leading to the corrective move lower this week.
So there is a battle with buyers and sellers with the 50% near 0.8800 and the 0.8900 level above providing the support and resistance levels that would need to be broken one way or the other to either increase the bullish bias or increase the bearish bias.
This article was written by Greg Michalowski at www.forexlive.com.
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