• 'The 0.7750 level is the key support area in AUDUSD': Hardy
• US tech giants declining into Thursday earnings from Amazon, Alphabet
• Copper at three-year high; Goldman Sachs says rally 'justified'
• US 10-year Treasury yields nearing important resistance at 2.4%
• Nasdaq 100 posts rising wedge-like pattern, Bollinger Bands narrowing
By Michael McKenna
Saxo Bank head of equity strategy Peter Garnry prefers to look at the FAAMG group – Facebook, Apple, Amazon, Microsoft, and Alphabet/Google – but notes this morning that all of these stocks appear soft into Thursday's earnings releases from Amazon and Alphabet "with the exception of Microsoft, which seems to have bucked the trend".
The downward move comes as analysts rein in expectations for the tech bellwethers while focusing on more bullish outcomes for US stocks at large. In Saxo Bank technical analyst Kim Cramer Larsson's view, the Nasdaq 100 is currently in a rising wedge-like pattern with expanding Bollinger Bands and key support lying around 6,050.
Garnry echoes Larsson's take, noting that he sees a move through 6,062 as likely to portend a downward spike.
In terms of Thursday's releases, Larsson notes that Amazon appears to have posted the final shoulder of a head-and-shoulders pattern signalling a reversal while pointing to strong support at 930.
As for Alphabet, Larsson points to massive RSI divergence and a Doji evening candle on the weekly chart as signalling a test of the longer-term rising trendline.
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Source: Saxo Bank
In the FX space, Saxo Bank head of forex strategy John J Hardy says that today's flash PMI releases from France, Germany, and the European Union could provide some movement ahead of Thursday's European Central Bank outing while investors look ahead to Friday's US GDP release and the confirmation of Federal Reserve chair Janet Yellen's replacement (due before November 3, according to Preseident Trump) for confirmation of USD strength.
"Another key factor is the 10-year US Treasury yield, which faces a key resistance level at 2.4%," says Hardy.
Overnight, Hardy points to 0.7750 as a key support level in AUD while noting that the Aussie's current bid likely reflects strong AUDNZD buying in the wake of New Zealand announcing a new, left-leaning government (complete with a minimum wage hike, environmental programmes, and more)
In commodities, Saxo Bank's Ole Hansen reports that copper currently sits at a three-year high on news that China is seeking affordable housing solutions; Hansen also notes that a recent Goldman Sachs report called the copper rally "justified" given global growth, a broadly weaker greenback, and supply shortfalls".
In gold, Hansen reports that prices are consolidating in the wake of Monday's high-volume break through the $1,280/oz level.
For more on equities, crude oil, the Dax index, the NZD, and more, watch today's Morning Call in its entirety via the link above.
Alphabet/Google is set to release earnings Thursday as tech shares show pronounced weakness.
Photo: Benny Marty / Shutterstock.com