US futures rose as the market reacted to positive earnings from Amazon. The company’s profits rose by 8% to $3.3 billion during the holiday quarter. The comprehensive revenue rose by 21% to $87.4 billion. Its cloud business delivered sales of $10 billion in the quarter. This was a 34% increase from a year earlier. The result came in the same week Apple and Microsoft released excellent results. The market also reacted positively to the news that IBM’s CEO, Virginia Rometty was stepping down. Rometty has been criticized for letting Microsoft and Amazon dominate the cloud computing industry.
The Japanese yen declined as the country released weak inflation numbers. Data from Tokyo showed that CPI declined from 0.8% in December to 0.7% in January. Tokyo is the most important city in Japan because most people live there. The Bank of Japan has struggled to bring the country’s inflation rate to the target of 2.0%. The country’s retail sales declined by 2.6% in December. This was after declining by 2.1% in November. On a positive note, the unemployment rate remained at 2.2% while the preliminary industrial production increased from -1.0% to 1.3%. Meanwhile, in China, the manufacturing PMI data from China Logistics declined from 50.2 in December to 50.0.
The market will focus on the coronavirus disease that is spreading in China and other countries. The disease has so far infected more than 9,000 people and killed more than 200 people. Yesterday, the World Health Organization (WHO) declared the virus a global health emergency. In addition, the US State Department told Americans not to travel to China while American Airlines staff are urging the company to stop some flights to China. Just yesterday, the US reported the first case of person-to-person transmission of the disease. The disease could have a major hit on the Chinese and global economy as industries are being disrupted.
EUR/USD
The EUR/USD pair declined slightly during the Asian session. The pair has dropped from yesterday’s high of 1.1040 to a low of 1.1025. The pair has been dropping in January after hitting a high of 1.1240 at the beginning of the year. The price is along the 14-day and 28-day exponential moving averages. The two averages appear to be making a bullish crossover. The RSI has moved from the oversold level of 30 to a high of 40. The pair may continue moving higher as February starts.
GBP/USD
The GBP/USD pair rose sharply yesterday after the BOE delivered its interest rates decision. The pair reached a high of 1.3110, which is along the 61.8% Fibonacci Retracement level. The pair appears to have found resistance at the current level. It is also slightly above the 14-day and 28-day exponential moving averages. The pair may decline today as yesterday’s upward momentum wanes.
USD/JPY
The USD/JPY pair rose from a low of 108.56 to a high of 109.13. The price is above the 14-day and 28-day exponential moving averages while the RSI has moved to 64. It has also moved slightly above the Ichimoku cloud. The Average True Range (ATR) has declined, which is a sign of low volatility. The pair may remain at the current levels today.
