The bull-run on Wall Street continues as corporate deals spurred on buying. Earnings season is still ongoing, but we have already had the figures out from most of the big name companies. Intel (NASDAQ:INTC) and Advanced Micro Devices (NASDAQ:AMD) are to team up together to try and rival NVIDIA (NASDAQ:NVDA) in the chip sector. Broadcom (NASDAQ:AVGO) are keen to acquire Qualcomm (NASDAQ:QCOM), and both stocks finished up over 1%.
Brent Crude oil and WTI rallied to levels not seen since June 2015 after a crackdown on corruption in Saudi Arabia. The shake-up has resulted in the arrest of Princes and politicians, and this came from the Crown Prince Mohammad bin Salman – who backs OPEC production cut. Traders are used to Saudi Arabia periodically calling for deeper or extended oil production cuts, but now it seems the Crown Prince means business.
Saudi Arabia is the largest oil producer in the world, and dealers don’t want to call their bluff. Brent Crude oil has traded above its 200-week moving average at $62.71 and WTI is eyeing its 200-day moving average at $58.58. If Brent Crude can hold above that metric, and if WTI can clear it and then hold it, we might see further gains.
Mario Draghi, the President of the European Central Bank (ECB) will give a speech in Frankfurt at 9am (UK time) today. Mr Draghi is speaking at the ECB forum on banking supervision so his comments may not move the euro too much. Besides, he made it clear that the majority of the big decisions in relation to monetary policy would have been made in October, so volatility could be low post his remarks today.
Yesterday, the services PMI reports for Spain, Italy, France and Germany were revised lower from the flash reading. This is slightly concerning seeing as the services sector is a crucial component of their economies. At 10am (UK time), the eurozone will announce the retail sales figures for September, and on a monthly and yearly basis the consensus is for 0.6% and 2.7% respectively.
EUR/USD – remains below the 100-day moving average at 1.1700, and if it holds below that level it could send the market to the 1.1574. The 50-day moving average at 1.1810 could act as resistance to rallies.
GBP/USD – is still in its upward trend and while it is above the 1.3000 mark, the outlook may remain positive. Rallies may incur resistance at 1.3335. A break below 1.3000 could send it to 1.2900.
EUR/GBP – is eyeing the 50-day moving average at 0.8935, and a break above it might put 0.9049 on the radar. Moves lower could find support at 0.8733.
USD/JPY – has been pushing higher since early September, and 114.73 could be the next level to watch. A break above 114.73, might see the market target 115.62 and support may come into play at 113.00. The next support level below that could be the 200-day moving average at 111.74.
FTSE 100 is expected to open 20 points higher at 7582.
DAX is expected to open 30 points higher at 13498.
CAC 40 is expected to open 7 points higher at 5514.
IBEX 35 is expected to open 31 points higher at 10347.
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