ECB Lifts the EUR, Amazon Soars & WTI Oil Pushes Over $90
EUR/USD => The pair rises to a 3-week high
Amazon => The stock jumps 14% post-results
Oil => The commodity hit a fresh 7-year high
EUR/USD Rallies after Lagarde’s Hawkish Turn
EUR/USD jumped 1.2% higher yesterday and it added to those gains today following a hawkish twist from the ECB. As expected, the ECB kept interest rates unchanged. The statement had a subtle change but nothing more. However, in the pursuant press conference, ECB President Christine Lagarde was surprisingly more hawkish, guiding for a rate hike by the end of the year, when previously no hike was forecast for 2022. The shift in tone comes as inflation the bloc hit a record high of 5.1% in January. Today attention is turning to the US economic calendar and the closely watched non-farm payroll report. Analysts are expecting 150k new payrolls in January, after 199k in December. January’s ADP payroll report was much lower than expected (-301k) which is sometimes, but not always, an indicator of what to expect from the non-farm payroll.
| U.S. Non-farm payroll | Actual 150k (49k) | Previous: 199k |
What’s next for EUR/USD?
EUR/USD broke above its rising trendline resistance and 50sma yesterday and shot higher finding resistance at the 100 sma and multi-month falling trendline at 1.1430. The RSI is supportive of more gains whilst it remains out of the overbought territory. Buyers have broken above 1.1430 and are looking to attack 1.1482, the 2022 high. Above here buyers could gain momentum. On the flip side support can be seen at 1.1385 the December high and 1.1371 the 50 sma.
Oil Rises to $90, a Fresh 7-Year High
WTI oil surged above $90 per barrel for the first time in 7 years yesterday. Oil prices rose $2 marking the best daily gains in three weeks amid a combination of supportive factors. On the supply side, OPEC+ raised its output quota which should pressurize oil prices. However, prices have since risen suggesting that the market isn’t convinced that the new levels will be reached. Output disruptions in Libya and Nigeria, as well as geopolitical tensions in eastern Europe and the Middle East, have come together raising concerns about oversupply in an already tight market. At the same time demand is rising amid Omicron fading in developed countries. Baker Hughes rig count data is due later.
Amazon Jumps After a Blowout Q4
Shares in Amazon surged 14% after hours following stronger than forecast Q4 earning as solid cloud growth made up for a weaker outlook on sales. Amazon reported EPS of $27.75 on revenue of $137.41 billion, against expectations of $3.71 on revenue of $137.75 billion. Breaking the numbers down further, Amazon Web Services, which includes the high margin cloud revenue unit grew a blowout 40%. Looking ahead and the picture was mixed with Q1 revenue guided for between $112-$117 billion, which was less than the $117 billion analysts expected. Amazon also announces that it will raise its Prime membership to cover rising costs.
Support can be found at $3000 (psychological level) and $2893 (January 31 low).
Resistance for the stock can be seen at $3170 (August & Oct low) and $3278 (50sma).
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