US Inflation Drives the USD, AstraZeneca & Twitter Reports
EUR/USD => The pair trades steadily above 1.14
AstraZeneca ADR => The stock trades 2.6% higher this week
Twitter => The stock trades 12% lower in 2022
EUR/USD Rises Ahead of Inflation
EUR/USD traded just a few pips higher yesterday in a quiet day. The German trade balance recorded a mild surplus and Fed speaker Bostic said that US inflation could be on the cusp of slowing down. His comments came ahead of today’s US CPI inflation data. Expectations are for US inflation to continue rising in January to a 40 year high. Elevated inflation could fuel bets of a more hawkish Fed, which will need to raise interest rates quickly to tame 4-decade high inflation. The Bank of America warned that the Fed could raise interest rates as many as 7 times across the year. In addition to US inflation, the European Commission will release its quarterly economic forecast.
|US CPI Jan YoY||Expected: 7.3% (0.3%)||Previous: 7%|
What’s next for EUR/USD?
EURUSD is extending its rebound from 1.1121, the 2022 low. The price has moved above the 50 sma, horizontal support at 1.1385 the December high, and is testing the 100 sma and multi-month falling trendline. The RSI is supportive of further upside. Buyers will look to break above 1.1480, the 2022 high to open the door to 1.1530 the October low. On the flip side, support can be seen at 1.1390 the December high, and 1.1310 a rising trend line dating back to late November.
AstraZeneca (ADR) Q4 Earnings Preview
AstraZeneca is due to report Q4 earnings today. Expectations are high with AstraZeneca expected to report quarterly revenue of $11.24 billion, a 47% increase from the $7.4 billion recorded in the same period the year before. Meanwhile, core EPS is expected to be $1.56, up from $1.07. This quarter will be the first quarter that AstraZeneca made a small profit on its COVID jabs, after initially selling at cost price. The improved profitability should then be reflected in the outlook for the year ahead. The Alexion acquisition is also expected to start reaping rewards in Q4, enhancing AZN’s drug portfolio for rare diseases, an area of the business which is expected to be high growth. AstraZeneca could also hike its dividend from the current level of $2.80 to $2.90 or even as high as $3.25.
Twitter Q4 Earnings Preview
Twitter is due to report Q4 earnings today, after the close. These will be the first set of results under the new CEO Parag Agarwal and come as the share price has halved in value over the past 12 months. More recently, social media stocks have been volatile since Facebook owner Meta reported disappointing numbers. Twitter is expected to prove resilient to the change in Apple iOS privacy settings, which was part of the downfall for Meta. 6.4 million users are expected to have been added in the final quarter of the year. Wall Street is also expecting a 23% increase in revenue compared to the same period the year before to $1.6 billion, with an operating income of $171 million.
Support can be found at 34.00 (last week’s low) and 32.00 (2022 low)
Resistance for the stock can be seen at 41.50 (12 January high) and 45.30 (January high)
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