General Electric Earnings Lower Than Expected

Posted by Rob

April 11, 2008

General Electric [GE] released it’s first quarter earnings data today. The earnings figures came out worse than expected which had a knock-on effect on the US dollar.

General Electrics share price fell over 11 percent today after the data was released.

GE blamed falling profits at its financial services businesses for the poor earning report.

The EURUSD pairing saw an upside in favour of the Euro as the GE announcement looks to pick up on a slowing US economy. On Wednesday, the ECB kept the Eurozone benchmark rate at four percent, whilst it looks ever-likely that the Federal Reserve will cut the US benchmark rate further.

The Euro reached $1.5826, a short distance from its all-time high of $1.5912 against the dollar set on the 10th April.

Antje Praefcke at Commerzbank said: ”In principle the hawkish ECB attitude should support the Euro so that we continue to foresee upward pressure in Euro-dollar and consider a test of the $1.60 mark to be likely over the coming days.” - FT.com

What The EURUSD Technical Chart Shows

Yesterday, the price didn’t move as expected, the price didn’t hold at the 38.2% Fibonacci retracement line, and instead went right through breaking the bottom Bollinger band to $1.5730. We can see an all-time peak for the Euro, which then pulled right back to the 61.8% Fibonacci retracement line. However, today we have seen the Euro gaining against the dollar yet again.

The price action has remained choppy from about 14:00 GMT, with spiking and small candlestick bodies. In such conditions no clear trading opportunity can be seen with EURUSD.

The 1-hour chart isn’t giving us a clear prediction with the stochastic heading downwards, but price moving upward in-line with the 55-day moving average.

Some economists are predicting the Euro will break through the $1.6000 in coming days, so upside (BUY) is still the favoured position to take on this pair.

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