Pre-Market: Stocks Mixed as Amazon Beats, Pound Falls of a Cliff

It has been a very active day so far in traditional financial markets, with heavy trading, especially in currencies and equities. Key GDP numbers were released in the UK and the US, while the earnings season is also still at full speed, so there was no shortage of catalysts. The Dollar’ strength remained the dominant trend, even as the Greenback is slightly off its highs around the US open, despite the better than expected US GDP growth in the first quarter.

EUR/USD, 4-Hour Chart Analysis

All eyes are still on the EUR/USD pair, which violated its trading range which has been intact for three months, falling below the 1.21 level, causing pain for Dollar sorts, which became a very crowded trade in the towards the end of 2017.

GBP/USD, 4-Hour Chart Analysis

While the US GDP release was a positive surprise growth in the UK came in well below expected, and that added to the string of negative data that has pushed rate hike odds lower in the last couple of weeks, halting the rally in the Great British Pound. The Pound got hit very hard after the release, and the currency fell to a 6-week low against the recently rallying Dollar, trading below 1.3750, just two weeks after hitting a two-year high near 1.44.

NASDAQ, 4-Hour Chart Analysis

The NASDAQ got a huge boost from Amazon’s great quarterly numbers, as the online retail giant surged to a new all-time high after hours and opened on record levels today as well. The other major indices are less bullish, and that divergence could mean that the bearish trend that we have been following will resume, ending the recent bounce in US equities. The lack of a broad rally is especially suspicious, as the successful meeting between the two Koreas would surely be enough for a green day in equities in a bullish environment.

Amazon (AMZN), 4-Hour Chart Analysis

Commodities Stable Despite the Dollar Rally

Gold, 4-Hour Chart Analysis

The Greenback’s strength persisted despite the continued pullback in US Treasury yields, but while commodities were under pressure yesterday, both gold and crude showed stability so far today, with the precious metal edging higher and the WTI trading only slightly in the red.

With commodity currencies also holding up, there are no clear risk-on/off pressures short-term, even as most asset classes are leaning bearish. European stocks continue to outperform, thanks to the weakness in the Euro, but just based on that we wouldn’t jump to conclusions, and bulls should remain cautious here, as the correction lows are still clearly in danger.

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Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.