Twitter earnings & PMI data are due
|EUR/GBP => The pair falls towards 0.85
Twitter => The stock climbs 4.5% this week
S&P500 => The index sits around a 3-week high
EUR/GBP looks to PMI data & UK retail sales
EUR/GBP rose 0.3% in the previous session after the ECB hiked rates by a larger than expected 50 basis points.
This was the first hike in 11 years as the ECB stepped up its fight against record-high inflation. The ECB is expected to hike rates again, possibly as soon as September. Today the pair is falling ahead of a slew of data, including UK retail sales and UK and eurozone business activity data as measured by the PMIs.
UK retail sales are expected to remain depressed in June, after falling in May, as the cost of living crisis starts to bite. PMI data from both the UK and the eurozone is expected to show growth slowed further in July.
|UK composite PMI
EZ Composite PMI
|Expected: 52.5 (1.2)
Expected: 51 (1)
Where next for EUR/GBP?
EUR/GBP has extended its rebound from 0.84 July low and has run into resistance at the 50 sma at 0.8535.
The price trades caught between the 50 and 100 sma. The bullish crossover on the MACD keeps buyers hopeful of further gains. Buyers need to rise over the 50 sma to test 0.8585, the weekly high. A move above here opens the door to 0.8620, the May high. On the flip side, failure to break over the 50 sma at 0.8530 could see the pair test support at 0.8485 ahead of the 100 sma at 0.8463 and 0.84.
Twitter Q2 earnings preview
Twitter is due to report Q2 earnings at a critical time for the company when stakes are high.
There will be no earnings call, making it particularly tough for the company to instil confidence with its court battle and that the business is solid no matter if a deal or no deal with Musk is done. Expectations are for EPS of $0.16, down 20%, while revenues are expected to be at 41.33b billion, up 11.8% YoY.
Twitter trades down 45% over the last 12 months. The share price has recently seen its fair share of volatility and at its current price suggests that the deal is not going through, at least not at the original price.
S&P500 is set to gain 3.5% this week
The S&P500 closed 1% higher, putting the index on track for gains of 3.5% across the week.
Yesterday, encouraging results from Tesla, which jumped 10%, helped push the index higher, overshadowing weakness in oil stocks. The market brushed off weaker than expected jobless claims, which rose 251k, the biggest gain in 8 months, up from 244k in the previous week.
Today futures are edging lower as attention remains on earnings from the likes of Twitter and American Express. US PMI data is due to be released and is expected to show a slowdown in growth in business activity.
|US composite PMI||Expected: 51.7 (0.6)||Previous: 52.3|
Support can be found at 3923 (50 sma) and 3800 (May low).
Resistance for the pair can be seen at 4000 (psychological level) and 4130 (100 sma).