The Fed, Tesla & BoC Are Set to Rock the Markets

Tesla  => The stock trades at a 5-week low

Gold  => The commodity rises towards $1850 

USD/CAD  => The pair falls for a 2nd day

Tesla Q4 Earnings Preview

Tesla is due to report Q4 earnings after the close. Tesla has already revealed that it recorded record deliveries in the last three months of 2022, shipping over 300,000 vehicles for the first time. On an annual basis that put deliveries at 936,172, a massive 87% increase from 2021. Going forwards Tesla is aiming to grow deliveries by 50% per year; analysts expect Tesla to deliver 1.375 million cars in 2022. However, in order to reach that figure the new factories in Texas and Berlin will need to ramp up production. Wall Street is expecting Tesla to report revenue of $16.35 billion, up from $10.74 billion the previous year. EPS is expected to climb to $1.63 from $0.24.

What’s Next for Tesla Share Price?

Tesla’s share price has been trending lower since the start of the year. The price has fallen below the key $1000 level which offered support across the past few months, it has also fallen below the multi-month rising trendline in a bearish move. The RSI is supportive of further downside whilst it stays out of overbought and the 20 sma is crossing below the 50 in a bearish signal. Sellers will be looking for a move below the 2022 low of $850 to head towards the 200 sma at $811. Buyers could look for a move above 950 and back above the rising trendline to attack $1000.

Gold Looks to the Fed

The price of gold pushed higher yesterday for a second straight session, briefly reaching a fresh monthly and yearly high in a broadly risk-off session. With a conflict brewing in Eastern Europe, demand for safe havens rose. Today attention is firmly on the Federal Reserve interest rate decision. The Fed is not expected to adjust monetary policy this month but is expected to prepare the market for a March hike as inflation hits a 4-decade high. A more hawkish sounding Fed could hurt demand for non-yielding Gold.

BoC Interest Rate Decision

The Bank of Canada is due to announce its interest rate decision. During the pandemic, the BoC slashed interest rates to 0.25% and started a C$5 billion a week bond buying program to support the economy. As the pandemic eased, the BoC was among the first banks to start withdrawing support and tapering bond purchases. The program concluded in October. Since then both Delta and Omicron appeared in Canada, however the economy has continued to perform well. The Canadian jobs market has been particularly strong with unemployment back below 6%. At the same time, inflation is on the rise, hitting its highest level in 3 decades. The central bank is not expecting inflation to ease soon. Whilst the BoC, in the December meeting, indicated that it would start hiking interest rates in March, expectations are rising that they could fire the starting gun today. This could lift the Canadian dollar. Although the USD will be influenced by the Fed rate decision later in the day

Support can be found at 1.26 (20sma 4-hr chart) and 1.2540 (50 sma 4-hr chart).

Resistance for the pair can be seen at 1.2705 (high 24 Jan) and 1.2812 (2022 high).

 


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