Focus on Copper today. 

Fundamentally, after the release of employment data and PMI data, metals are still under pressure due to potential secondary inflation risks in the United States. On the supply side, according to the latest statistics from the London Metal Exchange, copper inventories increased by 3,150 tons. The increase in inventories means that market demand has not expanded. These short-term news still did not lead to a significant decline in copper prices, suggesting that short-term copper still has room for long-term gains after digesting the market news. 

Technically, copper prices are once again close to the 200-week moving average on a weekly basis, and the market showed signs of resistance and rebound in the first two times. 

(Weekly chart of Copper, source: Ultima Markets MT4) 

The 65-week moving average continues to suppress the upper rebound space of copper prices. Pay attention to whether the final closing price of the market today on Friday can effectively break the 200-week moving average. The market deserves to focus on the short trend next week.

(Daily chart of Copper, source: Ultima Markets MT4) 

The short forces on the copper daily cycle temporarily have the upper hand. The stochastic oscillator crosses downwards. Since the downward trend since early August has been a downward motive wave, there is a certain probability that the recent decline will continue the extended downward trend. 

(1-hour chart of Copper, source: Ultima Markets MT4) 

On the intraday 1-hour period, the stochastic oscillator has not entered the overbought area for the time being, and the market is still likely to be a mess. Even if the Asian market is currently falling, we need to wait for the short signal of the stochastic oscillator indicator to be confirmed, and then wait for the breakthrough of the low before we can focus on intraday short trading opportunities.

(1-hour chart of Copper, source: Ultima Markets MT4) 

According to the pivot indicator in Ultima Markets MT4, the pivot price of the day is 3.7334. 

Bullish above 3.7334, first target 3.7575, second target 3.7862 

Bearish below 3.7334, first target 3.7047, second target 3.6805. 

Disclaimer 

Comments, news, research, analysis, prices and other information contained in this article can only be regarded as general market information, provided only to help readers understand the market situation, and do not constitute investment advice. Ultima Markets will not be responsible for any loss or loss (including but not limited to any loss of profits) that may arise from the direct or indirect use or reliance on such information. 

UK Rate Hikes Reached A Plateau 

Bank of England Governor Andrew Bailey said at a Treasury Select Committee hearing on the 7th that the interest rate hike policy is close to the peak, and BoE’s Monetary Policy Committee will make another decision on September 21.  

The Announcement

Britain’s annual inflation rate of 6.8 percent is higher than Prime Minister Rishi Sunak’s planned target of 5 percent by the end of 2023 and is the highest among G7 nations.

The governor explained that due to the increase in crude prices, the inflation data in August may be slightly higher than expected. At the same time, he believes that inflation will be obvious by the end of this year, especially in autumn.

In addition, he pointed out that the Monetary Policy Committee may finally vote in support of raising interest rates in September. 

(Bank rate record, Bank of England) 

Economic Insights

The Bank of England released a monthly survey on the 8th, showing output prices are expected to increase by 4.9% in the next 12 months. The figure, based on a three-month rolling average, was down 0.5 percentage from July and well below last year’s peak of 6.6% in September.

The outlook for wage growth has also dropped to an average of 5.1%, continuing a downward trend from a high of 6% in late 2022. The survey of recruiters points out a cooling labor market. The findings could slow the central bank’s pace of raising interest rates. 

Conclusion

In conclusion, it’s evident that the United Kingdom is currently facing a challenging economic situation with a persistently high inflation rate and signs of a cooling labor market. The comments made by Bank of England Governor Andrew Bailey and the data from the recent survey have sparked discussions about the future of interest rates and economic stability.

As we move forward, it’s crucial for individuals and businesses to monitor these developments closely, as they have the potential to impact various aspects of the economy. Whether you are a trader, investor, or simply someone interested in economic matters, staying informed is the key to making well-informed decisions in these uncertain times.

Remember that financial markets can be volatile, and it’s advisable to seek professional advice and conduct thorough research before making any significant financial decisions. As we await the upcoming decision by the BoE’s Monetary Policy Committee on September 21, the economic landscape in the UK remains a topic of great interest and importance.

Disclaimer  

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided. 

August Service ISM Surged, Heating up Concerns Over Inflation 

The Institute for Supply Management released the ISM services index for August, which showed a recovery in business activity. The index unexpectedly rose to 54.5 from market expectations of 52.5, up from 52.7 in July and reaching a six-month peak.

From the analysis of the service industry portfolio, as many as 13 of the 18 industries surveyed by the ISM non-manufacturing industry have increased.

Industries such as catering and accommodation, real estate leasing, construction, retail, transportation and warehousing have shown steady expansion of new order demand and willingness to recruit.

The service industry data was better than expected, driving up treasury yields, meanwhile, putting pressure on stock markets. The three major U.S. stock indexes all ended in decline. 

The ISM Non-Manufacturing Index profile 

The ISM Non-Manufacturing Index is a comprehensive indicator that tracks non-manufacturing activities such as employment trends, prices, new orders and other sub-items.

The index takes 50 as the critical point. If the index is at 50, it means that the economy of this month remains unchanged from the previous month; if the index is above 50 for several consecutive months, it indicates that non-manufacturing activities are expanding and prices are rising, implying that the overall economy is in expanding state.

On the contrary, when the index is below the 50 level, it means that the overall economy is in a state of contraction. 

(Service PMI, Institute for Supply Management ISM) 

Conclusion

The August ISM services index report has introduced a level of unpredictability and excitement to the financial landscape. It’s not just a data report; it’s a narrative, a story with twists and turns that continue to unfold.

To stay updated on this ever-evolving economic drama and gain access to expert analysis, make sure to follow our platform closely. We offer the key to unraveling the complex world of finance and economics, providing you with a structured approach to understanding the latest developments.

Disclaimer  

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided. 

Focus on XAU/USD today. 

Fundamentally, yesterday the United States released ISM data on the service industry, just like the market outlook shared on Monday. The Fed is currently looking for data support. Consumption is one of the three economic carriages in the United States. The good performance of the ISM service industry PMI will greatly stimulate the bullish trend of the US dollar. The PMI data unexpectedly strengthened in August to 54.5, reflecting sustained strength in consumer demand and the overall economy and strengthening hopes that the United States can avoid recession. It also brings potential signs that inflation will still rise, and the dollar will maintain a certain bullish trend until the data is digested this week. 

Technically, the gold finally fell below the 33-day and 7-day moving average yesterday, and the market’s short trend is relatively clear. 

(Daily chart of XAU/USD, source: Ultima Markets MT4) 

The stochastic oscillator also sent a short signal, and the market on the daily chart has a probability of going back to the moving average lines during the Asian session. 

(4-hour chart of XAU/USD, source: Ultima Markets MT4) 

On the 4-hour chart, after the market peaked and fell below the neckline this week, the moving average lines subsequently made a dead cross which is kind of short signal. It is worth noting that the stochastic oscillator currently indicates that the market is about to bottom out, and there is a certain probability of rebound or consolidation. 

(1-hour chart of XAU/USD, source: Ultima Markets MT4) 

According to the pivot indicator in Ultima Markets MT4, the pivot of the day was 1919.46. 

Bullish above 1919.46, the first target is 1923.54, and the second target is 1933.25 

Bearish below 1919.46, the first target is 1909.75, the second target is 1905.56 

Disclaimer 

Comments, news, research, analysis, prices and other information contained in this article can only be regarded as general market information, provided only to help readers understand the market situation, and do not constitute investment advice. Ultima Markets will not be responsible for any damage or loss (including but not limited to any loss of profits) that may arise from the direct or indirect use or reliance on such information.