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Silver Explodes 8% to 7-year High

AUD/JPY – Daily Candlesticks
Source: GKFX / MT4 (July 22, 2020)

AUD/JPY is back at 76.5 resistances for the 5th time, an occurrence that can often bring a breakout of the level. Should 76.5 resistance give way, a re-test of the 80-handle seems probable.

 

TAKEAWAYS


•    Silver rallies over 8% to reach 7-year high
•    Tesla reports 4th quarterly profit (technically qualifies for S&P 500)
•    Twitter earnings preview
•    DAY AHEAD: US initial jobless claims, Twitter Q2 results
 

 

MARKETS

 
It was another poor showing for the US dollar, which helped the euro and other global FX push higher. EUR/USD reached 1.16 while USD/CAD dropped below interim support at 1.35. The yen was biggest the biggest G10 FX faller.

Wall Street finished higher in a muted session hit by earnings jitters but supported by news the US government made a deal with Pfizer and BioNTech to produce 100 million COVID-19 vaccines if they are shown to be safe and effective. 

Stocks in Asia fell on Wednesday with only Chinese markets bucking the trend by finishing higher, while European shares declined, unwinding some of the prior day’s optimism about a new EU Recovery Fund.

Buying momentum in metals markets accelerated with silver touching $23 per oz for the first time since 2013 while spot gold hit $1865 per oz. A potential upside target for silver from here is $25, the highs reached in April and August 2013. Oil prices edged down after a surprise build in US inventories.
 

GURU WISDOM

 
“I contend that financial markets never reflect the underlying reality accurately; they always distort it some way or another and the distortions find expression in market prices.” – George Soros
 

Tesla Earnings

 
Tesla reported its Q2 earnings after the close Wednesday and shares look set to open higher on Thursday. The electric carmaker turned a profit of $104 million (GAP) which was $2.18 EPS. That’s the fourth consecutive quarterly profit – meaning Tesla now technically qualifies for the S&P 500 index. Revenues declined 4% year-over-year due in large part because of the coronavirus shutdown but supported by new models and a new car plant in Shanghai. While the results were solid, it’s worth considering that a year ago the shares were trading at $260, now they are over $1600.
 

Twitter Preview

 
After an embarrasing hack to top celebrities on the platform, Twitter now faces some disappointing earnings. Ad revenues are expected to have fallen 20% and the social media platform is expected to post a loss of $126 million, worse than the 8million loss in Q1. Any positive news about its delayed  API release, aimed at licensing out its data could offset some negativity.The Twitter share price sits at $36, up from the $20 low in March and around $32 where it started 2020.
 

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