Twitter taken over by Musk, earnings releases eyed

The USD tended to gain against a number of its counterparts yesterday as sense of uncertainty tended to provide some safe haven inflows for the greenback. It should be noted that yesterday, the market’s hawkish expectations for the Fed in conjunction with the possible adverse effects of China’s lockdown measures for Covid tended to feed worries for a possible economic slowdown on a global level. In the US equities markets it should be noted that Elon Musk’s bid for Twitter at $54.20 was accepted, practically signalling the takeover of the social media platform by the billionaire, yet volatility for the share’s price remained low. In a twist of the story, Twitter CEO Parag Agrawal told the company’s employees that the company is in the dark over Musk’s intentions while also stated that the future of the company is uncertain. Today we would expect equity market investors to keep their eye out for the release of the earnings reports and we note the releases of Google (#GOOG) and Microsoft (#MSFT) among others. Overall, should the earnings reports tend to excite traders, we may see the market sentiment improving, supporting US stockmarkets and having ripple effects also in the FX market and gold’s price. As for financial releases we also note from the US the release of the durable goods orders growth rate for March, the consumer confidence indicator for April and number of new home sales for March.

On the commodities front, oil traders are expected to watch out for the release of the US weekly API crude oil inventories figure and should there be another considerable drawdown, we may see oil prices getting some support as it would imply that conditions in the US oil market remain tight. It should be noted that WTI prices had dropped below $100 per barrel yesterday as worries for the demand side of the commodity tended to grow due to the Chinese lockdown measures yet rebounded somewhat during today’s Asian session as worries for the supply side emerged. Back in the FX market Aussie traders are to focus on the release of Australia’s CPI rates for Q1 and should the rate accelerate as expected we may see the Aussie getting some support as it may provide some confidence for RBA. It should be noted that market seems to be pricing in a number of rate hikes until the end of the year according to AUD OIS, yet the bank’s indecisiveness and caution seems to remain present for now.

On a fundamental level though the lockdowns in China may have an adverse effect on the AUD as they could imply a slowing of economic activity expansion in the Chinese mainland, thus lowering possibly Australian exports of raw materials. On the other hand, the Loonie rebounded during today’s Asian session after hitting a six week low point against the USD which may have been caused by the uncertainty in the markets as well as the drop of oil prices yesterday despite BoC Governor Macklem stating yesterday to Canadian lawmakers that the bank is to act forcefully to curb inflation. Today we note the planned speech of BoC Deputy Governor Timothy Lane. Should the Deputy Governor reiterate the Governor’s hawkish comments we may see the CAD getting some support, yet Loonie traders are also expected to influenced by the path of oil prices and the general market sentiment. USD/JPY maintained a sideways motion as it found some support on the 127.70 (S1) level. We tend to maintain a bias for the sideways motion to continue for the pair as long as it remains between the 128.70 (R1) resistance line and the 127.70 (S1) support level. Please note that RSI indicator below our 4-hour chart seems to remain near the reading of 50 also implying a rather indecisive market.

Should the market display a selling interest for the pair, we may see USD/JPY breaking the 127.70 (S1) support line and aim for the 126.75 (S2) support level. Should on the other hand buyers be in control of the pair’s direction, we may see USD/JPY breaking the 128.70 (R1) resistance line and aim for the 129.85 (R2) resistance level. AUD/USD bounced on the 0.7165 (S1) support line yesterday. It should be noted that as the pair bounced, it broke the downward trendline guiding the pair since the 21^st of April. Given that the prementioned downward trendline was broken we switch our bearish outlook and expect the pair to stabilise before deciding on the direction of its next leg. Please note that he RSI indicator is near the reading of 30, supporting the correction higher as it is in an ascending mode. Should the bears regain control we may see the pair breaking the 0.7165 (S1) support line and aim for the 0.7050 (S2) support level. Should on the other hand the bulls take advantage of the correction higher and turn it to a full buying interest of the market, we may see the pair breaking the 0.7285 (R1) resistance line and aim for the 0.7365 (R2) resistance level.

USD/JPY 4시간 차트