USD falls and stocks rise ahead of a data busy day
DAX => The index rises toward 13300
Dell => The stock trades down 17% YTD
EUR/USD => The pair rises towards parity
DAX rises ahead of GDP, IFO business climate
The DAX eked out a positive close on Wednesday, although still trades down 2.4% so far this week as investors digest a darkening economic outlook.
PMI data earlier in the week showed signs of activity slowing around across the economy amid rising cost pressures. The energy crisis is also worsening as Russia is set to halt gas flows for three days and natural gas prices soar.
Today the DAX futures are rising ahead of the open as attention turns to German Q2 GDP and IFO business climate data. Given the droughts in Germany hurting trade along the Rhine, the energy insecurity, with gas rationing a very real possibility, and record inflation, it’s not surprising that the business climate index is forecast to fall to its weakest level since the depths of the pandemic. A weaker than forecast reading could pressurise the DAX.
| Ger IFO business climate | Expected: 86.8 (1.8) | Previous: 88.6 |
Where next for DAX?
After rising to almost 14000 the price rebounded lower, falling below the 20 ad 50 sma, which combined with the bearish MACD suggests that there could be more downside to come.
Sellers need to takeout yesterday’s low of 13080 in order to test 13000 the psychological level and push back down to the YTD low of 12805. Buyers will look for a move over 13250 the 50 sma to expose 13570 the 50 sma. A move over 14000 could create a higher high.
Dell Technologies Q2 earnings preview.
Dell Technologies is to report Q2 earnings today.
The firms focus on corporate clients is expected to shield it from the slowdown in the personal computer market and could help it post upbeat quarterly earnings. Sector peers have all forecast a slowdown in PC sales as surging prices cool demand.
On the other hand, companies are upgrading equipment for the hybrid work era. Wall Street is expecting EPS of $1.64 on revenue of $26.49 billion a 1.4% rise. The stock trades down 17% so far this year.
EUR/USD rises ahead of ECB minutes, US jobless claims
After a choppy session, EUR/USD closed flat yesterday.
The USD held steady after mixed data while the euro bears paused for breath. US durable goods orders were unchanged across the month suggesting a cooling in the economy meanwhile pending home sales fell less than expected, raising optimism that the housing market was starting to settle even if for a brief time. Today the pair is rising as central bankers gather at the Jackson Hole in Wyoming. The highlight of the event is a speech by Jerome Powell tomorrow. Today’s attention will be on the release of the minutes from the latest ECB meeting, which saw the central bank hike rates. The market will be looking for clues on the ECB’S plans for future hikes. Meanwhile, the USD will be eyeing US Q2 GDP figures (2nd estimate) and jobless claims.
| US jobless claims | Expected: 253k (3k) | Previous: 250k |
Support can be found at 0.99 (round number) and 0.9850 (2022 low).
Resistance for the pair can be seen at 1.00 (parity) and 1.0170 (20 sma).
