An Aggressive Fed Boosts USD, Apple Reports & Oil Rises
Apple => The stock rises from a 2-month low
EUR/USD => The pair falls towards 1.12
Oil => The rises to fresh 7-year high
Apple Q4 Earnings Preview
Apple is set to release its fiscal Q1 earnings after the closing bell. The tech giant benefited greatly from the pandemic as people spent more time at home. Sales and profits soared. However, the pandemic is now bringing headwinds for Apple in the form of supply chain constraints. In the previous quarter, Apple noted that it missed $6 billion worth of sales due to supply chain problems. These headwinds are expected to have continued in Q1, which combined with weak US retail sales could suggest a weaker quarter for iPhone sales. Device sales growth of just 3.7% is expected. Still Wall Street expects revenue to grow over 7% to $119.33 billion, up from $111.44 billion the same period a year earlier. EPS is due to rise 13% to $1.91.
What’s Next for Apple Share Price?
After rising to a high of $182, Apple’s share price fell back to a low of $154. The fall below $157 was brief. This is a key level of horizontal support. A break below here could see the share price fall to $145, the November 11th low. The RSI is supportive of further downside, whilst it remains out of the oversold territory. However, it is on the cusp of oversold territory, so earnings could be the factor to prompt a turnaround. Buyers will look for a move over $159 the 50 sma & December 1st high to open the door to $276 the January 12 high.
EUR/USD Drops on a Hawkish Fed, Data Due
As expected, the Federal Reserve kept interest rates at 0.1% and stuck to the plan to end the bond-buying program in March. The Fed also indicated that it could be ready to start hiking interest rates in March and looks to reduce its asset holdings later in the year. EUR/USD fell to its lowest level in a month following the FOMC meeting, reflecting US Dollar strength on the back of a hawkish Fed. Today, there is plenty of data for investors to digest including US GDP, jobless claims, and German GFK consumer confidence. Weaker consumer morale in the Eurozone’s largest economy could see demand for the euro suffer further.
German consumer confidence
|Expected: 5.5% (3.2%)
Expected: 260k (-21k)
Expected: -7.8 (-1)
Oil Reaches a Multi-Year High
Oil prices climbed to $88 per barrel on Wednesday a fresh 7 year high on the back of tight supply and rising geopolitical tensions in Russia. Fears that Russia will invade Ukraine continue to grow, which is fueling concerns over supply disruption in an already tight market. Ukraine is a transit hub for oil and gas from Russia to Eastern Europe. Should Russia squeeze this supply, the oil supply could be reduced. Furthermore, the latest EIA inventory data showed that world oil inventories continued to decline. OPCE+ is not managing to increase output to match the higher output quota. Should tensions ratchet up further oil prices could reach $100 per barrel.
Support can be found at 84.00 (rising trendline support) and 81.86 (20 sma).
Resistance for the pair can be seen at 88.00 (2022 high) and 90.00 (psychological level).
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