US equities closed slightly higher as markets focused on earnings and upcoming economic releases, including US GDP and Core PCE Price index.

After hours, Meta reported its Q1 earnings, beating estimates, but its Q2 earnings are expected to be lower than investor estimates.

Meta stock experienced a significant drop of over 19% after hours, resulting in a decline of more than 25% from its all-time high. This indicates that the stock has entered a bear market phase.

US data ahead

Indicator Forecast Prior
Advance GDP QoQ 2.5% 3.4%
Advance GDP Price Index QoQ 3.0% 1.6%
Unemployment Claims 214K 212K
Pending Home Sales MoM 0.3% 1.6%
Core PCE Price Index QoQ 3.4% 2.0%

The impact of today’s economic releases would depend on whether any surprises are revealed. Estimates suggest that the growth rate in Q1 may slow down to 2.5% compared to 3.4% in Q4. Meanwhile, the Core PCE Price Index is anticipated to increase to 3.4% from 2.0% during the same period.

Despite the data released today, the most significant event is scheduled for Friday when the Core PCE Price Index for Month-over-Month and Year-over-Year will be released. This report is likely to have a significant impact on the market, depending on whether it confirms the recent fears that inflation is picking up again or not.

DXY downside retracement continues

The US Dollar Index advanced slightly yesterday. However, it failed to reclaim its 106.0 resistance area, leading to another decline earlier this morning during the European session back towards the 105.60s.

In the meantime, a break of this support would clear the way for a deeper decline, possibly towards 105.30 followed by 105.0. Today’s economic releases might be the catalyst for such a retracement. Technical indicators continue to ease back after being heavily overbought.

USDCAD nosedive continues

USDCAD tried to reclaim its 1.37 resistance area during yesterday’s trading. However, the pair failed to close above that resistance, posting a reversal candle on the daily chart.

Technical indicators continue to ease lower further after being heavily overbought. In the meantime, the next support area stands around 1.3660; a break of this support would clear the way for further declines towards the next support area, which stands around 1.36.

 

Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.

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