S&P 500 retreats ahead of Microsoft, Apple, and Alphabet earnings

US stock futures erased some of the earlier gains as investors waited for quarterly results from big tech companies like Microsoft, Apple, and Alphabet. Futures linked to the Dow Jones, S&P 500, and Nasdaq 100 index declined by more than 0.15%. Analysts expect that these results will show that these companies did well in the second quarter as demand for technology rose. The results will come a day after Tesla released strong quarterly results as its net income rose to more than $1.5 billion. US equities also declined as tensions about the ongoing Chinese regulations rose. The actions have affected some of the leading companies in the country like Alibaba, Tencent, and Meituan.

The US dollar index rose as traders waited for the latest US consumer confidence data and Fed’s interest rate decision. Analysts expect that the country’s consumer confidence declined from 127 in June to 123.9 in July. This trend is mostly because of the Delta variant of coronavirus. The variant has pushed the number of new coronavirus cases in most states upward. The dollar has risen even as traders price-in a relatively dovish Federal Reserve. This is evidenced by actions in the bond market. The 10-year bond yield declined to 1.254% while the 30-year has declined to 1.90. This performance has pushed the real yield to the negative zone. 

Cryptocurrency prices declined after Amazon refuted claims that it was looking to start accepting Bitcoin. Rumours that the company will start accepting the currency emerged after the company made a job posting for a blockchain and cryptocurrency lead. At first, the company said that it was exploring the digital currency space, which pushed the coin above $40,000. In another statement, the firm refuted claims that it will start accepting Bitcoin. Still, the fact that the firm is actively hiring a cryptocurrencies lead is a positive catalyst for Bitcoin because of its significant size of operations.

EURUSD

The EURUSD pair tilted lower ahead of the latest consumer confidence data. It declined from a high of 1.1820 to the current level of 1.1770. On the four-hour chart, the pair is inside the falling wedge pattern shown in yellow. Oscillators are also at the neutral level while the pair is slightly below the 25-day moving average. Therefore, the pair will likely remain in the current range ahead of the FOMC decision. The falling wedge hints that the pair will break out higher after this decision.

USDCHF

The USDCHF pair rose slightly as the US dollar bounced back. The pair rose to 0.9185, which was slightly higher than Monday’s low of 0.9150. On the two-hour chart, the pair has moved slightly below the 23.6% Fibonacci retracement level. It is also between the horizontal channel whose support and resistance levels are at 0.9132 and 0.9232, respectively. The RSI indicator is also ay the neutral level of 53. Therefore, like the EUR/USD, the pair will likely remain inside this range ahead of the FOMC decision.

SPX500

The S&P 500 index is hovering near its all-time high ahead of key earnings from companies like Microsoft, Apple, and Alphabet. Its futures are trading at $4,407, which is slightly below the all-time high of $4,422. On the four-hour chart, the upward trend is supported by the 25-day and 50-day moving averages while the price is slightly above the support at $4,392. The index will likely resume the bullish trend today.