A busy day ahead – MU earnings, OPEC, UK GDP & US inflation
Micron Technologies => The stock falls 40% this year
Oil => The commodity rises towards $109
GBP/USD => The pair falls to a 2-week low
Micron Technologies Q3 earnings preview
Micron Technologies is due to report Q3 earnings.
The chip company guided for EPS of $2.46, a 30% rise from a year earlier, and Wall Street expects revenue to rise 16.5% in the third quarter to $8.7 billion. Margins are also likely to have improved as it shifts more toward data centers and industrial applications. However, lower margin smartphone and computer sales which account for over half of revenue, could be softer owing to the cost of living crisis. The earnings could also reveal the effect of the COVID shutdowns in China and lost business due to the war in Ukraine.
Where next for the Micron Technology share price?
The Micron Technology share price has tumbled almost 40% from its January all-time high, dropping to a 19-month low of $55 earlier this month, which is now considered immediate support.
It trades below the 20 & 50 sma, and the RSI hints to further losses while remaining out of oversold territory. Sellers need to break below $55 to extend the bearish trend to $51.20, falling trendline support, and $50 round number. Buyers will need to re-take $60 to expose the 20 sma at $62.70, the 50 sma at $66.2, negating the near-term downtrend, and head towards 75.40, the June high.
Oil awaits OPEC decision
Oil prices fell 1.7% yesterday after data showed a surprise build in US inventories.
However, WTI crude oil has still rallied over 5% since Friday as tight supply fears outweigh concerns over a potential economic slowdown hurting the demand outlook. Supply has been tight since Russia invaded Ukraine and the West hit Moscow with sanctions.
Today OPEC+ will announce their output plan for August. In the last OPEC meeting, the oil-producing nations bowed to growing pressure from the West and agreed to increase production to 648l barrels per day, up from 432k initially agreed. The group is not expected to raise output further, particularly as there are growing doubts over how much more they, particularly Saudi Arabia and UAE, can ramp up production.
GBP/USD looks to UK GDP, US inflation
GBP/USD tumbled 0.5% in the previous session, falling to a two-week low in risk-off trade and following hawkish remarks from Federal Reserve Chair Jerome Powell.
The US central bank head reaffirmed bets for more aggressive rate hikes, saying that the US economy was well-positioned to handle tighter policy. His comments came after US GDP was downwardly revised. The pound struggled after a cautious tone from BoE Governor Andrew Bailey, who gave a much bleaker assessment of the UK economic outlook.
Today the pair is rising as attention turns to UK Q1 GDP, which is expected to confirm the initial reading. US Core PCE, the Fed’s preferred inflation gauge, is expected to show a slight cooling in inflation, which could help the USD ease back.
|UK GDP Q1 QoQ
US Core PCE
|Expected: 0.8% (1.2)
Expected: 4.7% (0)
Support can be found at 1.2100 (round number) and 1.1934 (2022 low).
Resistance for the pair can be seen at 1.2184 (May low) and 1.2295 (20 sma).