Following were the closing rates of the US Dollar, Saudi Riyal, UK Pound, UAE Dirham and other foreign currencies in Pakistan on the date of October 14, 2019.
- Mexican peso consolidates after rising more than 4% over the last two weeks.
- USD/MXN still biased to the downside but needs a break under 19.30 to clear the way to more losses.
The USD/MXN pair dropped last week, extending the correction after being rejected from above a long-term downtrend line that stands around 20.05.
The decline found support above the 20-week simple moving average, near 19.30. A weekly close below, would point to more losses, and to a test of the 18.90 area, horizontal support and also an uptrend line.
US Dollar approaching yearly highs- breakout at risk into 98.37/42
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The US Dollar Index is up more than 2.4% from the June low with DXY now approaching multi-year inflection slope ahead of the FOMC interest rate decision and US Non-Farm Payroll this week. These are the updated targets and invalidation levels that matter on the DXY weekly price chart heading into the close of the month. Review my latestWeekly Strategy Webinar for an in-depth breakdown of this US Dollar trade setup and more.
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US DOLLAR PRICE CHART – DXY WEEKLY
Notes: In my last US Dollar Weekly Price Outlook we noted that the index was testing a major resistance-confluence at 97.87 where the 61.8% retracement oft eh 2017 decline converges on basic trendline resistance. Price closed just pips above this region last week with the breakout at risk while below this threshold heading into this week’s FOMC interest rate decision.
EURUSD PRICE ACTION TURNS TO EUROZONE INFLATION, US CONSUMER CONFIDENCE DATA
Spot EURUSD currency traders shift focus to Tuesday’s release of Eurozone and US inflation numbers in addition to US Consumer Confidence
EURUSD implied volatility appears low and indicates attention remains fixated on the upcoming July Fed meeting
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The EURUSD Forex Economic Calendar is stacked for Tuesday’s trading session with high-impact data slated to cross the wires out of the Eurozone and US. Updated readings on GDP, inflation and consumer confidence are expected, which all have potential to spark volatility in spot EURUSD.
Despite the several economic indicators due for release that typically move the market’s needle, Tuesday’s data dump out of the Eurozone and US is anticipated to be broadly overlooked by forex traders judging by EURUSD implied volatility.
STOCK MARKET OUTLOOK:
AAPL is one of the world’s largest publicly traded companies and is viewed as a stock market bellwether by some – affording the company significant sway over equity sentiment
Trade war headwinds or concerns likely carry the largest implications for the broader market, while stock-specific themes may damage AAPL shares directly
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STOCK MARKET OUTLOOK: TOP 3 THEMES TO WATCH IN AAPL EARNINGS
AAPL stock traded higher on Monday, likely in anticipation of quarterly results due Tuesday. The tech-giant currently stands as the second largest publicly traded company by market capitalization and some stock traders look to the corporation as a bellwether for the larger equity market. Consequently, Apple’s earnings report can carry significant implications for the entire equity market and have even sparked a currency flash crash. That said, there are various themes to watch, ranging from trade war concerns to sector-specific headwinds. Here are the three most important.
FIRST AND FOREMOST: TRADE WARS
The first, and likely most important theme to be cognizant of, is commentary on the ongoing US-China trade war. Any indication that the trade spat has weighed, or will weigh, on earnings more than originally anticipated will likely rattle both Apple and broad-market investors alike. Given the company’s brand loyalty, size and robust cash reserves, it is widely believed Apple is well suited to withstand transitory threats. With that in mind, Apple shares may grapple with any negative development comparatively well while the broader market – comprised of company’s that do not enjoy the same attributes as Apple – may suffer the consequences. The broader equity implications this theme can carry make it the most important on the list.
INTEL ACQUISITION AND QUALCOMM
Last week, Apple announced a $1 billion acquisition of Intel’s (INTC) smartphone modem business. The deal was inked to further progress Apple’s 5G technology for iPhones, but also carries consequences for another member of the tech sector – Qualcomm (QCOM). While the technology is still far from launch, the enhanced in-house capability for Apple will eventually allow Apple to avoid royalty payments to Qualcomm that total around $2 billion a year according to Bloomberg.
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While the acquisition does not have an immediate impact for the parties involved, it may weigh on QCOM earnings in the future while allowing Apple to provide stable pricing. Therefore, what investors should look for in the earnings call on Tuesday is any commentary regarding the timeline and corresponding cost-cutting or revenue forecasts from the freshly-signed deal. This is likely to have the least impact on the broader-market, but could directly influence AAPL, INTC and QCOM.
The British Pound has opened the week with a break down to fresh two-year-lows, plummeting below the 1.2400 level that had previously helped to hold support.
It’s a big week for GBP/USD as rate decisions take place in both the UK and the US. Wednesday brings what is expected to be the FOMC’s first rate cut in over a decade; and Super Thursday takes place less than 24 hours later when the BoE provided updated projections and a press conference to go along with their rate decision. Also on the economic calendar is the Non-Farm Payrolls release on Friday, making for a busy latter-portion of the week for the GBP.
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GBPUSD PLUMMETS TO FRESH TWO-YEAR-LOWS AHEAD OF FOMC, BOE SUPER THURSDAY
It’s been a rough start to the week for the British Pound as the currency has been slammed-lower to start this week’s trade. While much of the economic world’s attention is focused squarely on Washington DC for the Wednesday FOMC rate decision, threats of No-Deal Brexit have pushed GBP/USD to its lowest spot rate since March of 2017. As discussed over the past two weeks, GBPUSD has been one of the more attractive long-USD scenarios. As the Greenback has continued to gain, bearish prognostications around the Pound have helped GBP/USD to remain aggressively-offered over the past month.
