USD Bounces Back, Markets Eye Nvidia’s Earnings

Technical Factors Playing a Major Role

Yet another day of the week is being dominated by the U.S. dollar. This is happening in the absence of significant movement in bond yields, which suggests that this is primarily a technical issue. The USD has been recently weakened, as evidenced by the RSI indicator showing oversold values, or values below 30 points. We also had an interesting situation in the dollar index where we moved down to local support and what we observe today indicates a false test and breakout upwards. Therefore, on EUR/USD, we have a continuation of the rebound from 1.12 and a move downward towards the support at 1.11.

A Lot Riding on One Company

The stock market today is eagerly anticipating the report from Nvidia. Theoretically, it might seem that one company couldn’t spark a major movement, but as past incidents involving this particular company have shown, anything can happen. Nvidia has become a flagship company for the fundamental bull market associated with artificial intelligence. Expectations are astronomical. Both earnings per share and revenue are expected to increase by a whopping 138% and 113% respectively. Should these figures be confirmed, it could certainly accelerate further growth on Wall Street, leading to new peaks for Nvidia stock.

Oil Prices are Falling

Concerning today’s macro calendar, there aren’t many events that could cause significant volatility. Possibly the publication of US oil inventories at 16:30 could be of interest. There has been a lot happening with black gold this week. Initially, there was a significant upward movement due to rising tensions in the Middle East, but subsequent days saw a return movement and downward direction towards the lows, marking the beginning of the rally upwards for WTI, around 72 USD per barrel. While this is a natural pullback, it must be noted that the strengthening USD in the market means that a downward direction is only natural. As for the PLN, it will, as we have previously mentioned, be somewhat of a hostage to changes in the main currency pair. And if the popular Euro heads south, our PLN will be on the uphill and vice versa.

Author: Krzysztof Pawlak, Currency Analyst at Walutomat.pl