The euro declined to the lowest level in five years as investors worried about the soaring gas prices in Europe. Russia’s Gazprom announced that it had stopped shipping natural gas to Bulgaria and Poland. The country has insisted that it will only send gas to the countries as long as they are prepared to pay in rubles. Therefore, there are concerns that the country will end its shipments to other European countries like Germany and France in the coming weeks. As a result, gas prices surged to record highs. Christine Lagarde will deliver a speech later today.
America’s futures rose sharply as investors focused on the ongoing corporate earnings. The Dow Jones rose by more than 258 points in the futures market. Similarly, the S&P 500 and Nasdaq 100 indices rose by over 0.50%. These gains happened amid mixed earnings. For example, Microsoft’s shares rose by more than 3% after the company published strong results. Spotify shares rose by more than 4% after the company upgraded its forward guidance. On the other hand, Boeing and Alphabet’s shares crashed after company’s earnings disappointed. Other earnings scheduled today are Meta Platforms and Raymond James.
The Australian dollar declined sharply even after the upbeat Australian consumer inflation data. According to the Australian Bureau of Statistics (ABS), consumer inflation rose from 3.5% in Q4 to 5.1% in Q1 of this year. On a QoQ basis, inflation almost doubled from 1.3% to 2.1%. In total, the CPI index number rose from 121.30 to 123.90. Therefore, analysts expect that the Australian inflation will keep rising in the coming months because of the rising cost of energy. As such, there is a possibility that the RBA will start hiking interest rates soon.
The AUDUSD pair declined to a low of 0.7125, which was the lowest level since February 27th. It has dropped below all moving averages. Also, the pair has dropped to the lower side of the Bollinger Bands while the Relative Strength Index (RSI) has dropped to the oversold level. The pair is also below the dots of the Parabolic SAR. Therefore, the pair will likely keep falling as bears target the key support level at 0.7100.
The EURUSD pair crash continued as worries about the European economy continued. The pair has dropped below the 25-day and 50-day moving averages. Also, oscillators like the Relative Strength Index (RSI) and Stochastic Oscillator moved to the oversold level. The pair also moved below the important support level at 1.0753. Therefore, the path of the least resistance for the pair is lower.
The Nasdaq 100 index is hovering near the lowest level since last year. It is trading at $13,045, which was substantially lower than this year’s high of over $16,000. On the four-hour chart, the index has moved to the lower side of the Bollinger Bands and is below the short- and long-term moving averages. The index will likely keep falling as the earnings season continues.
Source: FXStreet – OctaFX Analyst Team