USDCAD => The pair holds above 1.27
Chevron => The trades at an all-time high
DAX => The index eases away from 15500
USDCAD Eases From Monthly High, Inflation Data Due
USDCAD rallied for a second straight day yesterday, gaining 0.5% and rising to a monthly high. The USD advanced following the Fed meeting which saw the US central bank prepare the market for a March rate hike. Stronger than expected economic growth in Q4 also boosted the USD further. High consumer spending helped the US economy record its strongest pace of growth in 38 years. Today, the pair is edging lower from the monthly high as US inflation data comes into focus. The US Dollar could rebound if the Fed’s preferred inflation gauge, the Core PCE index, shows that inflation rose again in December. High oil prices are offering some support to the Lonnie.
US Core PCE Index
|Expected: 6.9% (4.6%)
Expected: 4.8% (0.1%)
What’s Next for USDCAD?
USD/CAD rebounded off the multi-month rising trendline and has extended its gains above the 20 sma and the falling trendline dating back to December 20. This, in addition to a move above the key 1.27 horizontal support and the bullish MACD is keeping buyers hopeful of further gains. Resistance can be seen at 1.2813, and 2022 high ahead of 1.2850 the late December high. Meanwhile, support can be seen at 1.27 ahead of 1.2645.
Chevron Q4 Earnings Preview
Chevron, the oil giant is due to report Q4 earnings today. The share price reached a record high this week ahead of what are expected to be solid earnings. Chevron, the second-largest oil producer in the US is expected to post earnings of $3.12 in the final three months of the year, compared to a $0.20 loss in the Q4 of 2021. Higher oil prices are expected to be positive for earnings with revenue expected to rise 78%. The share buyback program will be in focus after December’s announcement when Chevron said it would return $3-$5 billion per year up from $2-$3 billion.
DAX Looks to German GDP Data
The DAX closed 0.4% higher on Thursday marking its third straight day of gains. However, given the steep 3.8% loss on Monday and the expected softer start today, the index is still down on the week heading into the last session. The market mood improved again yesterday, helped in part by an unexpected improvement in German consumer confidence. Today’s attention will be on German GDP data, which is expected to show a slowdown in economic growth in the last three months of 2020 as Omicron cases rose sharply and some restrictions were imposed. The markets will also continue to monitor escalating tensions in eastern Europe.
|German consumer confidence||Expected: 5.5% (3.2%)||Previous: 2.3%|
Support can be found at 15060 (December low) and 14853 (2022 low).
Resistance for the DAX can be seen at 15688 (50 sma) and 15952 (January 19 high).
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