The tech pioneers Microsoft (NASDAQ: MSFT) and Google's parent company Alphabet (NASDAQ: GOOGL) are reporting their latest earnings results after today's closing bell. It will be interesting to see how these company’s last quarter results look and the impact they could have on the stocks. Recently, the overall market sentiment has remained challenging while tech giants managed to record a decent performance in the first two quarters supported by the revitalized growth prospects propelled by new AI tools. Investors are potentially anticipating robust financial results from the tech giants as they remain key players in the AI industry.
European shares eased from the early gains after the latest HCOB PMI data showed the Eurozone economy contracted the most in nearly three years, dragged by both the manufacturing and service sectors. Meantime, the US stock futures remain under pressure and trade flat as investors are waiting for the next round of earnings results, especially mega-cap tech companies.
Crude oil futures extend the decline, falling on a rise in recession fears following the release of weak PMI data from European economies. However, considering the last two session’s strong bearish momentum the oil prices can surely rebound in the short term if market sentiment stabilises. The prices fell on Monday after a media report claimed that Hamas is close to releasing foreign hostages it has been holding for over two weeks.
In the currency market, EURUSD extended the retreat after weak HCOB Eurozone PMI numbers were released. HCOB Eurozone Manufacturing PMI fell to 43 in October 2023 from 43.4 in September, the lowest in three months. The currency pair started this week with a strong bullish note and hit a fresh monthly high of 1.0690 today early European session boosted by broad-based U.S. dollar weakness. As of this writing, the currency pair trades below 1.0650. Technically, the medium-term trend remains supportive If the US dollar regains upside strength this week, we could see an extension to the weakness in the euro.
The safe haven metal retreated back to previous session lows. The recent bounce from Monday’s low stalled at the daily resistance around $1983 per ounce and showed multiple failures in the lower time frames. For today. the main drivers for the gold remain the movement of the US dollar and S&P global PMI data from the US.
On the data front, the UK reported robust employment data. The data showed that the unemployment rate dropped slightly to 4.2% in the quarter to August, as against a 4.3% reading reported in the three months to July. Meanwhile, the latest Flash PMI suggests the UK economy still struggling in October. UK Services PMI edged down to 49.2 in October 2023 from 49.3 in September, the lowest in nine months.
Moving ahead today, the important events to watch:
US –S&P global manufacturing PMI: GMT – 13.45
US – S&P global services PMI: GMT – 13:45
Technical Outlook and Review
EURUSD: On the technical side, the short-term momentum is neutral now as the pair reversed from the daily highs. The next immediate support is 1.0635 then 1.0620. For further downside, the bears need to see a confirmed 4-hour close below 1.0590. On the flip side, a move above 1.0690 again will push the pair into a new trading zone, which may offer further buying opportunities until the 1.0720/30 zones.
The important levels to watch for today: Support- 1.0630 and 1.0600 Resistance- 1.0690 and 1.0720.
GOLD: For today, immediate support is expected at the $1964 area, with this zone having held on Monday while further down, demand is also expected around $1958, which will act as the next area of support. On the flip side, the first immediate resistance level for the pair is $1975, then the stronger resistance is $1982/83.
The important levels to watch for today: Support- 1964 and 1958 Resistance- 1975 and 1983.
Quote of the day – “The core problem, however, is the need to fit markets into a style of trading rather than finding ways to trade that fit with market behavior.” – Brett Steenbarger.