EUR/USD Outlook: Bears Are Pausing Ahead Of ECB

TRADING ANALYSIS

The EURUSD is moving within a narrow range around 1.1800 handle in early Thursday, awaiting signals from today’s ECB policy meeting.

The market expectations are mainly for dovish event that would add pressure to the single currency for attack at key supports at 1.1704/1.1694 (2021 low / Fibo 38.2% of 1.0635/1.2349 rally).

Long tails of daily candles of past three days signal that larger bears are facing headwinds, but remain firmly in play, as daily studies maintain negative momentum and moving averages remain in bearish setup.

Falling 10DMA (1.1811) and 20DMA (1.1838) track the downtrend from early June and mark solid resistances, with close above these indicators to sideline immediate downside risk.

Res: 1.1811, 1.1838, 1.1850, 1.1881.
Sup: 1.1751, 1.1737, 1.1704, 1.1694.

European stocks rise thanks to strong company performance

UNITED STATES, WASHINGTON (EDUFINTECH) – European stocks rallied on Wednesday on strong company reports and a recovery in the tourism sector.

The pan-European STOXX 600 Index was up 1.07% by 10:45 am ET. The tourism sector jumped 3.82%, recovering from losses caused by fears of a rapid rise in coronavirus cases.

Germany’s DAX Index rose 0.48%, Britain’s FTSE 100 Index rose 1.23%, and France’s CAC 40 Index rose 1.05%.

Novartis rose 1.85% after the Swiss drugmaker posted a nearly 20% increase in second-quarter underlying net income, beating market expectations, and retained its 2021 guidance.

German business software developer SAP fell 1.83% despite raising its forecast for the second time this year.

Shares of Daimler AG, the Mercedes-Benz manufacturer, decreased by 1.27% after the company warned that the global shortage of semiconductor chips will lower car sales in the second half of 2021.

Oil prices fall due to unexpected growth in US inventories

UNITED STATES, WASHINGTON (EDUFINTECH) – Oil prices fell on Wednesday after data showed an unexpected increase in US inventories last week, heightening worries about weakening fuel demand due to a sharp rise in coronavirus cases.

Futures for Brent crude oil fell 0.56% to $ 68.96 per barrel by 8:30 GMT, WTI – by 0.54% to $ 66.84 per barrel.

The market “came under slight downward pressure during today’s morning trading after a bearish and rather unexpected API stocks report,” according to a note from analysts at ING Economics.

US crude and gasoline inventories rose last week, while distillate inventories fell, two market sources said, citing data from the American Petroleum Institute (API) on Tuesday.

At the same time, ten analysts interviewed by Reuters expected that oil reserves would fall by an average of about 4.5 million barrels.

Investors are now awaiting data from the US Energy Information Administration, which could confirm an increase in oil inventories after eight consecutive weeks of decline.

The OPEC + deal to increase oil production by 400,000 barrels per day every month from August to December led to a sharp drop in oil prices on Monday. The sell-off has intensified on concerns about demand amid rising delta-variant coronavirus cases in major markets such as the US, UK and Japan.

Daimler downgraded sales forecast due to lack of microcircuits

UNITED STATES, WASHINGTON (EDUFINTECH) – A global semiconductor chip shortage will hit car sales in the second half of 2021, German automaker Daimler AG said. At the same time, the company maintained its annual profit margin forecast.

Daimler is among the largest automakers to have cut production this year due to chip shortages caused by the coronavirus pandemic.

At the same time, demand for cars rose sharply against the backdrop of renewed economic activity.

Sales of Mercedes-Benz cars jumped 27% in the second quarter, while in Europe, Daimler’s second market after China, by 54%.

The company expects annual car sales to remain at the 2020 level. The German automaker had previously predicted that sales this year would be well above last year’s.

The company on Wednesday confirmed that the group’s adjusted earnings before interest and taxes (EBIT) in the second quarter were 5.42 billion euros ($ 6.38 billion).

Daimler released preliminary quarterly results last week.

Dollar near year-to-date highs amid coronavirus fears

UNITED STATES, WASHINGTON (EDUFINTECH) – The dollar is trading near year-to-date peaks on Wednesday amid fears of a sharp rise in coronavirus cases and expectations of higher interest rates. Investors are waiting for the meeting of the European Central Bank.

The euro was down 0.15% to $ 1.1761 by 09:30 GMT, close to the year-to-date low of $ 1.1704. The single European currency hit its lowest since April on Tuesday.

“The monetary policy of the ECB is now expected to remain super-soft for even longer, which is a deterrent for the euro ,” said Kim Mundy of the Commonwealth Bank of Australia.

Canadian, Australian and New Zealand dollars came under pressure.

The Canadian dollar lost 0.39% against the US dollar to hit $ 1.2726. The Aussie was down 0.48% to $ 0.7294, while the New Zealand dollar was down 0.29% to $ 0.6896.

The dollar index against a basket of six major currencies rose 0.15% to 93.109.

The pound sterling slipped 0.21% to $ 1.3598.

Cryptocurrencies have recovered some of their losses on Tuesday. Bitcoin rose 3.39% to $ 30,796.32, while Ethereum climbed 4.56% to $ 1,867.95.

Wall Street rallies on hopes of economic recovery

UNITED STATES, WASHINGTON (EDUFINTECH) – US stocks closed sharply higher on Tuesday, recovering from several straight days of plunge as strong financial results and optimism about the economy boosted risk appetite.

“The buy-down mentality is emerging in the market,” said Chuck Carlson of Horizon Investment Services.

Economy-sensitive small-cap stocks and transportation were the top gainers.

The yield on 10-year US Treasuries rebounded from five-month lows. As a result, interest rate-sensitive bank shares rose 2.6%.

“Economically sensitive stocks are rising today,” added Carlson.

“When the (yield) of 10-year Treasury bonds declines in a short amount of time, this usually does not happen in an economy that is supposed to grow. The rise in (yield) of 10-year bonds indicates that the economy may not fall sharply.”

The Dow Jones index closed with an increase of 1.62% to 34.511.99 points, the S&P 500 index – by 1.52% to 4.323.06 points, the Nasdaq – by 1.57% to 14.498.878 points.

Halliburton shares rose 3.7% after the US-based company closed with a profit for the second quarter in a row thanks to a rebound in oil prices that fueled increased demand for oilfield services.

Eurozone government bond yields near multi-month lows amid economic worries

UNITED STATES, WASHINGTON (EDUFINTECH) – Borrowing costs in the eurozone eased marginally on Wednesday, holding close to multi-month lows hit yesterday amid concerns over global growth.

The yield on 10-year German government bonds fell one basis point to -0.42%, holding close to more than five-month lows reached the day before, at -0.44%.

The 30-year yield also lost one basis point, falling to 0.04%. Since the beginning of the week, it has dropped 8 basis points, close to 0%.

“The rally at these levels may be losing momentum, but the resilience of the eurozone bond markets looks set to continue,” said Christoph Rieger of Commerzbank.

Analysts say an auction of 30-year German bonds later on Wednesday could be a test of investor appetite for long-term bonds after the recent spike in prices and falling yields.

Tesla intraday: the upside prevails as long as 645.6 is support

TRADING ANALYSIS

Tesla intraday: the upside prevails as long as 645.6 is support

Our pivot point stands at 645.6.

Our preference:
The upside prevails as long as 645.6 is support.

Alternative scenario:
The downside breakout of 645.6 would call for 635.2 and 629.

Comment:
The RSI is above its neutrality area at 50. The MACD is positive and above its signal line. The configuration is positive. Tesla is trading above both its 20 and 50 period moving average (respectively at 646.5 and 644.76).

Apple intraday: the upside prevails as long as 145.4 is support

TRADING ANALYSIS

Apple intraday: the upside prevails as long as 145.4 is support

Our pivot point stands at 145.4.

Our preference:
The upside prevails as long as 145.4 is support.

Alternative scenario:
Below 145.4, expect 144.2 and 143.6.

Comment:
The RSI is above its neutrality area at 50. The MACD is positive and above its signal line. The configuration is positive. Apple is trading above both its 20 and 50 period moving average (respectively at 144.43 and 145.79).

Nasdaq 100 (CME)‎ (U1)‎ Intraday: the bias remains bullish

TRADING ANALYSIS

Nasdaq 100 (CME)‎ (U1)‎ Intraday: the bias remains bullish.

Pivot:
14640.00

Our preference:
Long positions above 14640.00 with targets at 14780.00 & 14865.00 in extension.

Alternative scenario:
Below 14640.00 look for further downside with 14520.00 & 14445.00 as targets.

Comment:
The RSI is mixed with a bullish bias.