Fed rate decision and earnings from Meta and Boeing
| EUR/USD => The pair rises to 1.0150
Boeing => The stock trades 14% higher this month Meta => The stock trades over 50% lower this year |
EUR/USD rises ahead of the Fed rate decision
EUR/USD fell 1% in the previous session after Gazprom, the Russian state-owned gas firm, said it would cut gas supply to Europe through the Nord Stream pipeline to just 20% of its capacity.
This gas price jumped, raising concerns about gas rationing and elevated inflation for longer. The move came after German business sentiment plunged to a two-year low earlier in the week of gas security concerns and rising prices putting Germany on the brink of a recession.
Today the pair is advancing with all eyes on the Federal Reserve, which is expected to raise interest rates by 75 basis points and could guide for a further 50 basis point hike in September. A hawkish Fed is likely to lift the USD; in addition to the Fed, German GFK consumer confidence is due and is expected to fall in August.
| Ger. consumer confidence | Expected: -29 (1.6) | Previous: -27.4 |
Where next for EUR/USD?
EUR/USD rebounded from 0.9950, 2022 low, before running into resistance at 1.0275 and failing to push above the 20 SMA.
The RSI is pointing higher but is still in bearish territory. Buyers would need to retake the 20 sna at 1.0195 to open the door to 1.0275, last week’s high. A move over here opens the door to 1.0345, the May low. On the flip side, failure to retake the 20 sma could see the price fall towards parity, and a break below 0.9950 creates a lower low.
Boeing Q2 earnings preview
Boeing’s cash flow will be under the spotlight as the plane maker reports Q2 earnings.
Supply chain disruptions are expected to have limited its ability to capitalize on rising demand for the long-haul Dreamliner planes amid huge returning demand for air travel. The positive cash flow target could even be pushed back to 2023 as it contends not only with supply chain disruptions but also rising costs riven higher by inflation.
Any updates on China will also be scrutinized as the large domestic market still hasn’t seen the return of the 737 MAX jet. Expectations are for Q2 revenue of $17.57 billion, up 3.4%. EPS is expected to be $0.44 up from a loss of $1 the previous year.
Meta Q2 earnings preview
Q2 is expected to have been another tough quarter for Meta, with another sequential decline in Facebook user numbers expected.
When Facebook revealed a drop in user numbers for the first time, earlier this year the share price tanked. In addition to user numbers falling, ad prices have also come under pressure, mainly after Apple made it more difficult to target users, pushing marketing money elsewhere.
Revenue growth is expected to be modest, and earnings are expected to come under pressure as costs price. If Snap and Alphabet are anything to go by, given the dependence on ad revenue, earnings could be disappointing. Share trades are down 50% so far this year.
Support can be found at 155 (2022 low) and 137 (March ‘20 low).
Resistance for the index can be seen at 167 (20 sma) and 170 (50 sma).
