Over the past 24 hours, investors have been attempting to establish the current economic climate taking into account the latest economic data from China. This is specifically vital for the price of oil, which is trading between a wide price range ($82.36 - $85.89). Traders seem to believe that the true value is within the current price range, but are hoping for a clear trend to form.
The US Dollar Index is still within the price range formed towards the end of Friday’s session, after its sharp decline. The price is currently hovering just above 112.00 as the currency came under pressure from the latest PMI report for both Services and Manufacturing.
Over the next 24 hours, investors will be focusing on the earnings reports of two of the world’s major technology companies - Google and Microsoft. Traders will also largely be focused on this afternoon’s US Consumer Confidence, tomorrow’s US Advanced GDP and European Central Bank Rate decision. All are deemed to be of high importance and can affect both the currency and equities markets.
Crude Oil
The price of crude oil is currently attempting to form a “bearish breakout” from the current price range. The price has declined by 0.85% at the beginning of the European session. Currently, indicators on shorter timeframes are indicating a downward trend based on this downward price movement. However, traders should be cautious that this movement does not develop into a false breakout and price rejection.
Crude Oil 15-minute chart on October 25th
The price of crude oil has been reluctant to continue its downward trend which originally formed on the 10th October. Nonetheless, the instrument remains under a lot of pressure from poor economic data across more or less all economies. However, investors are specifically cautious about the economic slowdown in China as it is the world’s largest importer of oil, as well as global geopolitical tensions.
China confirmed that they imported 4.3% less oil, likely due the economic slowdown as well as the country’s zero Covid-19 policy. Of course, this decline is based on previous months and is not influencing the current level of demand. But traders are still concerned. Investors are also concerned that the Chinese GDP figure was 1.6% lower than expected and Retail Sales for September declined from 5.4% to 2.5%.
NASDAQ
The price of NASDAQ was moving sideways and remained within yesterday’s price range during this morning’s futures market. The price is currently at a major resistance point so traders considering “long positions” will be looking for a bullish breakout. The price movement is more likely to be influenced by the earning’s reports scheduled to be released throughout the day, rather than technicals.
NASDAQ 30-minute chart on October 25th
Microsoft will be one of the main price drivers for the NASDAQ. The price of Microsoft stocks has so far declined by 26% in 2022 due to extreme pressure from interest rate hikes and recession risks. However, the price has increased over the past 2 days as we approach the company’s earnings report release. Microsoft has laid off fewer employees than its competitors and the company is predicted to see a higher EPS along with only a slight fall in revenue. Of course, this can only be confirmed once the report is released.
Alphabet and Twitter are both expected to release their earnings throughout the day - an event that traders will certainly be paying attention to. Tomorrow, Meta is due to release theirs and investors are hoping that good performance and a currently weaker USD, gives the US indices a boost.
Quick Summary:
- Crude oil is attempting to break out of the current price range after poor economic data from all economies, but especially the Chinese one.
- China confirms that they have imported fewer barrels of oil over previous months due to restrictions and lockdowns.
- Investors are waiting for the latest earnings reports from Meta, Twitter, Google and Microsoft.
- NASDAQ is currently hovering at a major resistance level attempting to break through, but the price will largely depend on the upcoming earnings reports.
