Markets trade cautiously ahead of the Fed
EUR/USD => The pair hovers around 1.05
Uber => The stock trades 30% lower this year
Oil => The commodity rises by 1%
EUR/USD looks to the Fed rate decision
EUR/USD rose 0.1% in the previous session after eurozone wholesale inflation jumped to a record high and unemployment in the region fell to a record low.
Meanwhile, the USD retreated after reaching an almost 20-year high earlier in the week and despite data showing that job vacancies reached a record high in March. Attention is now shifting to the Federal Reserve interest rate decision later today.
The Fed is expected to raise rates by 0.5%, which is fully priced in, so attention will be on the speed at which the Fed plans to trim its balance sheet and how aggressively it intends to raise rates going forwards.
|EZ PPI March YoY
U.S. job vacancies
|Actual: 36.8% (5%)
Actual: 11.5M (0.2M)
Where next for the EUR/USD price?
EURUSD trades below its multi-month descending trendline, its 50 & 100 sma.
The chart is bearish. However, the price ran into resistance last week at 1.0470, which sent the RSI into oversold territory, and which can be considered a near-term floor. A break below here would be significant and opens the door to 0.3060, the January 2017 low.
Buyers will need to rise above 1.0590, the April 29 high, in order to be able to bring 1.08 and 1.0910, the 50 sma, in focus.
Uber Q1 earnings preview
Uber is due to report Q1 earnings after the bell and come as the share price trades down over 30% year to date.
On the one hand, mobility is expected to have improved from the Omicron hit. In February, Uber said that mobility demand was back at 90% of its pre-pandemic level, which prompted the rise hailing app to raise Q1 EBITDA by $25 million. Rising fuel prices amid the fallout from the Russian war have in part been passed on to the customer with a fuel surge.
Meanwhile, the delivery business helped Uber withstand COVID headwinds, as people ordered more rather than go to restaurants. This side of the company could slow going forwards. Freight could well prove to be the next area of growth. This UBER is aiming to book its first-ever annual profit in 2022. In Q1, revenue is expected to grow 75% to $6.1 billion, up from $3.5 billion the year before.
Oil rises on tighter supply.
The oil price dropped 2.6% yesterday after concerns over the demand outlook in China overshadowed supply concerns as the EU mulls over imposing restrictions on Russian oil.
The EU is moving closer to agreeing to at least reduce its dependence on Russian oil, although Hungary and Slovakia want to be excluded from any agreement. On the demand side, COVID cases in China keep rising, and lockdown restrictions in Beijing seem inevitable, hurting the demand outlook further. Today oil prices are falling after API data overnight showed a substantial drawdown on crude oil and fuel stockpiles fueling supply concerns.
Crude oil stockpiles fell by 3.5 million barrels, more than the 800,000 forecast. EIA stockpile data is due later today.
Support can be found at 100.00 (psychological level) and 97.80 (rising trendline support).
Resistance for the stock can be seen at 107.75 (last week’s high) and 109.80 (April 18 high).