Volatility pauses ahead of ECB, but not in Bitcoin
EUR/JPY => The pair steadies after a 1.7% jump
Oracle => The stock rose 3.7% yesterday
BTC/USD => The cryptocurrency drops below 40k
EUR/JPY rises ahead of ECB rate decision
EUR/JPY is on the rise for a third straight day.
The pair rallied 1.7% yesterday after softer tones from Russia and Ukraine sparked cautious optimism ahead of today’s third round of peace talks in Turkey. Attention is now turning to the ECB rate decision, due later.
The central bank is not expected to change monetary policy even as inflation rises to 5.8% and is set to climb further as energy prices jump following Russia’s invasion and Western sanctions.
In addition to soaring inflation expectations, the eurozone economy is expected to see slowing growth owing to the fallout from the war and sky-high energy prices. This puts ECB Governor in a difficult position of navigating stagflation.
The ECB could adopt a more dovish stance, pushing rate hike expectations back remaining supportive of the economy.
Where next for EUR/JPY?
EUR/JPY rebounded off 124.40, a yearly low, extending gains above the falling trendline resistance towards the 20 sma.
The Receding bearish on the MACD, combined with a move over support at 127.90, keeps buyers hopeful of further upside. The pair is currently testing resistance at 128.33; a move above here exposes the 20 sma at 129.00. However, it’s worth noting that the 20 SMA crossed below the 50 SMA in a bearish signal. Sellers could look for a move below 127.40, the late December low and 126.60, the falling trendline support to target 124.40.
Oracle earnings preview
Oracle, the software and cloud computing giant, is due to publish Q3 earnings after the closing bell today.
Earning comes as the stock has managed to gain 5.7% across the past 12 months, despite a 25% decline since December, and as the company suspends all business operations in Russia.
Oracle has been one of the better performing names among large-cap software tech. Although the $28.3 billion all-cash deal for Cerner, the health information services provider, has received mixed reviews, mainly as it is an expensive deal at $95 per share for a company whose revenue is less than $6 billion.
Any insight on how this deal will support fundamentals could help support the share price. Expectations are for Q3 revenue to rise to $10.51 billion, a 4.3% increase year on year, while adjusted earnings are expected to rise 1.7% YoY.
Bitcoin jumps 8% then falls below 40k
Bitcoin had rallied over 10% over the past two days after the Biden administration revealed a keenly awaited executive order for cryptocurrencies.
The order instructs government agencies to officially recognise and regulate digital assets in the US, emphasising the need to develop the cryptocurrency industry responsibly.
The US government appears to be adopting a more active supportive stance towards cryptocurrencies which could accelerate institutional adoption. Fears of a regulatory clampdown eased, and the market cheered the White House’s commitment to the industry.
BTC/USD rose over $40k following the unveiling of the order. However, gains were short-lived, with Bitcoin slumping over 5% today, tracing US futures lower.
Separately, Yoon Suk-yeol won the presidential election in South Korea and is in favour of cryptocurrency deregulation and lower taxes on the industry.
Support can be found at 37000 (weekly low) and 34500 (February low)
Resistance can be seen at 40000 (round number) and 43700 (100 sma).
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