• Prior -4.4%
• Market index 208.4 vs 206.5 prior
• Purchase index 165.3 vs 162.4 prior
• Refinance index 416.0 vs 421.3 prior
• 30-year mortgage rate 7.07% vs 6.85% prior

Mortgage applications increased slightly in the past week as the jump in purchases activity helped to offset a decline in refinancing activity. This comes despite a massive 22 bps jump in the average rate of the most popular US home loan to above 7% again – its highest since November last year.

This article was written by Justin Low at www.forexlive.com.

The BoE surprised at the last meeting delivering a
50 bps rate hike instead of the 25 bps expected as the hot employment report
and the higher inflation data forced the central bank to choose a more
aggressive action. Yesterday we got another employment report and this
time it missed expectations on the jobs side but beat again on the wages side
which points to a wage price spiral in action. In fact, the market is pricing
in a higher chance of a 50 bps hike at the next meeting, although the UK CPI
report next week will probably decide if it’s going to be 25 bps or 50 bps.

On the other hand, the BoJ remains stuck with its
dovish monetary policy even if Japan’s core inflation keeps climbing to new
highs. There are tentative signs of a possible exit from this policy though but
the recent comments from the BoJ board members suggest that we won’t see any
change in the near future.

GBPJPY Technical Analysis –
Daily Timeframe

On the daily chart, we can see that after the
incredibly strong rally out of the hot UK employment report in June the
momentum started to wane near the 183.00 level. The price then started to pull
back into the trendline but
without a change in the fundamentals, so this looks like a technical
retracement from overstretched levels. The moving averages are also
threatening a bearish crossover, which is something to watch closely.

GBPJPY
Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the rising wedge around
the 183.00 led to the deeper pullback once the price broke out to the downside.
We can see that we also had a divergence with the
MACD
signalling weakening momentum and a possible pullback or reversal coming. The
price is now near a strong support zone
where we can find the trendline, the 180.00 round number, the base of the wedge
pattern and the 38.2% Fibonacci retracement level.

GBPJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have another divergence with the MACD right when the price is nearing the
strong support zone. We should see the buyers stepping in here with a defined
risk below the level and target a new high into the 185.00 level. More
conservative buyers may want to wait for the price to first break above the
downward minor trendline before piling in. The sellers, on the other hand, will
want to see the price breaking below the strong support zone to pile in
aggressively and extend the selloff towards the 173.00 level.

This article was written by FL Contributors at www.forexlive.com.

The recession in the manufacturing sector in the
biggest economies in the world has been weighing on the Copper price. The lack
of economic stimuli coupled with low demand and restrictive monetary policies,
suggest that we may see even lower prices going forward. In the short term
though, China might start to stimulate its economy much more given the risk of deflation, so we
might see stable or higher prices going forward.

Copper Technical Analysis –
Daily Timeframe

On the daily chart, we can see that Copper got
rejected from the 3.9575 resistance where we
had also the 61.8% Fibonacci retracement level
for confluence. The
strong selloff led to a downside crossover of the moving averages which
points to a bearish bias. We can notice that the sellers are now leaning on
that red 21 moving average and the 3.8245 resistance to position for more
downside. A strong break above the 3.8245 level should invalidate the bearish
setup.

Copper Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we have also
the 50% Fibonacci retracement level at the 3.8245 resistance. This makes that
resistance zone a strong level and a break above the 61.8% Fibonacci
retracement level would entirely invalidate the bearish setup. In fact, we can
notice that the black trendline forms an
ascending triangle pattern
with the resistance, so a break on either side should lead to a sustained move
in the direction of the breakout.

Copper Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price is basically ranging within the ascending triangle. The best strategy
would be to sit and wait for a breakout on either side supported by a
fundamental catalyst and then go with the flow.

Upcoming Events

Today we have the US
CPI report which is expected to be a pivotal release for the upcoming FOMC rate
decision and especially for the following ones. A miss to the expectations
should be risk positive and support Copper going forward, while a beat should
lead to a risk off mood in the markets and send the Copper price lower. After
the CPI we have the US Jobless Claims report on Thursday and the University of
Michigan Consumer Sentiment report on Friday.

This article was written by FL Contributors at www.forexlive.com.