RBA hikes rates and Bitcoin eases ahead of US data
EUR/AUD => The pair holds steady at 1.5430
Pfizer =>The stock falls toward $45
BTC/USD => The cryptocurrency holds over 20k
EUR/AUD rises after the RBA hikes by 25bps
EUR/AUD is holding steady on Tuesday after the RBA raises interest rates by 25 basis points, the seventh straight interest rate hike. The Aussie briefly rose following the announcement, although it was expected. However, with inflation still rising in Q3 to 7.3%, the market may have thought that a larger rate hike was needed. The move by the RBA comes after the ECB hiked interest rates by 75 basis points last week, taking the benchmark rate to its highest level since 2008. With inflation still rising, hitting a record high in October of 10.7%, the ECB could look to hike rates by 75 basis points again in December. Even though economic growth has slowed considerably, the central bank is likely to focus on price stability and bringing inflation back to the 2% target level, even if that means tipping the economy into recession.
Where might the EUR/AUD price head to?
EUR/USD appears to have run into resistance at 1.5706 and has been trading rangebound over the past month, capped on the upside by 1.5706 and on the lower side by 1.54, the weekly low. The price has fallen through the 20 sma, which, combined with the bearish crossover on the MACD, could be keeping sellers optimistic of further downside. Sellers could need a break below 1.54, the weekly low and the rising trendline resistance to bring 1.53 into focus, the May high, before exposing the 50 sma at 1.5070. On the flip side, a move above the 20 sma at 1.5490 could bring 1.57 the October high into target/ A move above here could create a higher high.
Pfizer Q3 earnings preview.
Pfizer is due to release Q3 earnings. COVID-19 is expected to be a key theme in earnings, with Wall Street forecasting a decline in revenue by 12% year on year to $21.1 billion. Meanwhile, EPS is expected to rise 4.7% to $1.40. With Pfizer coming up against increasingly tough comparatives from the COVID-19 vaccines. COVID-19 vaccine sales are expected to be in the region of 80% lower than last year at $2.5 billion. While sales of the alternative COVID-19 treatment Paxlovid have helped lower demand for the vaccine, quarterly sales are also expected to have already peaked in the previous quarter. Given that these COVID treatments account for 50% of all sales, the outlook for them is considered crucial in deciding how markets react.
BTC/USD slips in cautious trade ahead of the Fed
BTC/USD is falling, extending losses from the previous session but remains above 20k, as the cryptocurrency tracked equities, particularly the tech-heavy Nasdaq, lower. The market mood is cautious as investors look ahead to Wednesday’s Federal Reserve monetary policy decision. BTC/USD had rallied in recent weeks, in lockstep with stocks, as expectations grew that the Fed could adopt a soft approach to rate hikes after November. Some are growing more confident that a bottom is now in place for both stocks and BTC/USD. Looking ahead, attention will be on US ISM manufacturing figures and JOLTS job openings ahead of Friday’s non-farm payroll. Strong data could help fuel hawkish Fed bets drag on demand for Bitcoin.
| US ISM manufacturing | Expected: 50 (0.9) | Previous: 50.9 |
Support can be found at 20k (psychological level) and 18660 (last week’s low).
Resistance for the crypto can be seen at 21100 (October high) and 22800 (September high).
