Although numerous economic reports have been released in the past few days, markets have remained relatively stable. This is not unexpected, as investors are currently paying more attention to the US corporate earnings, as well as eagerly anticipating the upcoming GDP and Core PCE data, which are scheduled to be released on Thursday and Friday.

Tesla soars +10% after disappointing earnings

Tesla’s stock rallied over 10% in after-hours trading despite disappointing earnings. The company reported its first YoY revenue contraction since 2020.

The reason for the rally is that Tesla reaffirmed its commitment to innovation and introduced more affordable models with advanced autonomous technologies, with Elon Musk leading the way.

This year, Elon Musk warned about the possibility of a disappointing earnings season due to high-interest rates. As a result, the market is reacting more to future expectations than to the current reality.

DXY below 105.0

The US Dollar Index continued to decline further during yesterday’s trading on the back of the Manufacturing and Services PMI’s data. So far, such a move remains within the predicted corrective move before the upside trend resumes, as technical indicators remain overbought.

In the meantime, the next support level stands at 105.65, while a break through that support would clear the way for further declines, possibly towards 105.30 followed by 105.00.

Yen above 155.0

Right before the beginning of today’s US session, USDJPY briefly spiked above 155.0 physiological resistance, increasing the possibility of the Bank of Japan (BoJ) intervening.

Yesterday, reports suggested that the Bank of Japan (BoJ) might provide some indication regarding the timing of the next interest rate hike. This move was aimed at preventing further weakening of the Japanese Yen. As a result, USDJPY briefly declined during the US trading session yesterday before recovering to reach 154.80.

As mentioned before, the BoJ intervention is a matter of time. However, since USDJPY is currently known as the most crowded trade, traders are advised to be very careful with their risk levels in such a trade.

Euro near 1.07 resistance

EURUSD tried to break above its 1.07 resistance area during yesterday’s trading, following the better-than-expected PMI data in Europe and the disappointing PMI data in the US. However, the pair eased back during today’s session towards 1.0680.

In the meantime, technical indicators have shifted to slightly bullish after being heavily oversold, which keeps the door open for further gains ahead as a corrective move.

A break through 1.07 with a stabilization above it would clear the way for further gains, possibly towards the 1.0750 resistance area.

 

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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