Nasdaq futures rose after surprise earnings from Tesla. The closely-followed electric car company reported adjusted earnings per share of $1.86. This was better than what most analysts were expecting. Their expectations range from a loss of $1.25 to a profit of $0.34. The earnings were from revenue of $6.3 billion. The positive numbers show that the company is maturing at a time when auto sales are easing. Early this month, the company said that it delivered 97k vehicles in the quarter. This was below the targeted 100k. Meanwhile, Microsoft continued its winning streak. The company reported earnings of $1.38bn and a revenue of $33.06bn. These were bigger than the estimated $1.25bn and $32.23bn respectively.
The Japanese yen was unchanged even after the country reported weak manufacturing data. In October, the country’s flash manufacturing PMI dropped to 48.5. This was lower than September’s 48.9. It was also the lowest level it has been since 2016. A PMI reading that is below 50 is usually a sign that an industry is contracting. Meanwhile, new manufacturing orders declined by the most since June 2012. The activity was hit this month by Typhoon Hagibis. The typhoon led many companies to shut down and many people to stay out of work. The country has also been a victim of the global trade war that has been going on for more than a year. Still, some of the wounds are self-inflicted. For example, the country’s shipments to South Korea have plummeted after limiting the export of sensitive materials to the country.
The euro moved slightly higher in the Asian session. This is as the market waited patiently for the decision by the European Central Bank (ECB). The bank is expected to leave the deposit facility rate unchanged at -0.50%. This is after a ten-basis cut in the previous month. The bank will also guide on the decision to restart quantitative easing. The QE will start in November. This will be the final rate decision by Mario Draghi, who will be replaced by Christine Lagarde. Meanwhile, the market will receive the flash PMI data from European countries and durable goods orders from the US.
EUR/USD
EUR/USD pair rose in the Asian session as the market waited for the ECB decision. As of writing, the pair is trading at 1.1137, which is higher than the previous low of 1.1105. On the hourly chart, the price is slightly above the 14-day and 28-day moving averages. The RSI has been on an upward trend, rising from below 30 to 60. The pair appears to be trying to retest the previous high of 1.1180. The pair may do exactly this in case of positive flash PMI data and a hawkish ECB. The potential levels to watch will be the previous high of 1.1180 and the previous low of 1.1100.
USD/JPY
The USD/JPY pair was unchanged even after the disappointing manufacturing numbers from Japan. As of writing, the pair is trading at 108.60, which is two pips below yesterday’s high. On the hourly chart, the pair is between the range that it has been in the past two weeks. The price is along the middle line of the Bollinger Bands while the Average True Range has declined to the lowest level in a few months. At this point, the pair may break out in either direction in the near term. The levels to watch will be the important support of 108.30 and the previous resistance of 108.95.
USD/CHF
USD/CHF pair has been on an upward trend since October 20 when it traded at 0.9840. Yesterday, the pair reached a high of 0.9915. As of writing, the pair has declined slightly and is trading at 0.9900. On the 30-minute chart, the price is along the 38.2% Fibonacci Retracement level. It has also established an important support as shown below. The pair’s momentum indicator is along the 100 level. Today, the pair will likely continue the upward trend. If it does, the potential level to watch will be the 50% Fibonacci level of 0.9920.
