• WTI crude climbs to highest levels for the year as oil continues to impress
• Equities continue to hold steady so far on the day
• US MBA mortgage applications w.e. 4 August -3.1% vs -3.0% prior
• White House reportedly to detail plans restricting some US investments in China
• China considering talks with Japan at ASEAN meeting after Aso visit to Taiwan – report

Markets:

• EUR leads, CHF lags on the day
• European equities higher; S&P 500 futures up 0.2%
• US 10-year yields up 1.4 bps to 4.038%
• Gold flat at $1,924.63
• WTI crude up 1.0% to $83.74
• Bitcoin down 0.6% to $29,813

It was a quiet session as there were no major economic data releases in European trading today. Market flows were relatively light as well, with major currencies not really showing too much appetite.

The dollar was mildly weaker earlier on but is now trading more mixed and little changed in general, as traders start to turn their focus towards the US CPI report tomorrow.

EUR/USD stuck around 1.0960-70 levels while USD/JPY held above 143.00 around 143.10-30 for the most part. There weren’t any exciting moves on the session involving FX as equities and bonds were also less enthused.

European stocks are holding higher, catching up to the late dip buying in Wall Street yesterday. Meanwhile, US futures are holding slightly higher but the gains are relatively mild for now and indicative of just a slight breather after the continued selling since August began.

The standout in terms of performance today is oil, with WTI crude rising to near $84 and up 1% to its highest levels for the year.

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

• Prior -3.0%
• Market index 194.5 vs 200.7 prior
• Purchase index 149.9 vs 154.1 prior
• Refinance index 416.1 vs 433.6 prior
• 30-year mortgage rate 7.09% vs 6.93% prior

A further slump in both purchases and refinancing activities led to another drop in mortgage applications in the past week. Housing market conditions are not faring well as rates continue to hold higher amid tighter financial conditions. Here’s a look at how purchases activity have been tracking:

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

It’s certainly an impressive run as oil has come up strong after rallying since July, now rising to its best levels since November last year.

WTI crude in particular has been sustaining around its 200-week moving average from March to June and even with the lack of initial excitement from the Saudi news, it is now turning things around and quite mightily to say the least.

The jump higher today is also taking out the April highs after a stunning turnaround yesterday amid the more negative risk mood. The rebound saw oil prices come up from a low of $79.97 to end the day higher at just under the $83 mark.

And with oil now breaking higher on the day, the technicals dictate that there is plenty of upside room for oil at the moment. Couple that with a tighter market and this rally could really have legs. Suddenly, those $100 forecasts don’t look too shabby.

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

Bitcoin continues
to surprise as it remains resilient to many headwinds. Yesterday we even saw a
big rally after some banking woes, which
resembled the bullish reaction following the regional banking crisis seen in
March. Looks like Bitcoin is the go-to asset in case we see more troubles in
the banking sector. Anyway, the price action remains choppy amid different
drivers, so the technicals remain the only way to play it.

Bitcoin Technical
Analysis – Daily Timeframe

On the daily chart, we can see that Bitcoin
yesterday has rallied above the support turned resistance and it’s
now eyeing the 31K high. We already saw a fakeout previously, so the buyers
will need to be careful here and manage well risk. Another fakeout should give
the sellers more conviction and take the price back to the 28475 level if not
lower.

Bitcoin Technical Analysis
– 4 hour Timeframe

On the 4 hour chart, we can see that we got a
rejection right from the previous fakeout high, so the level to watch now will
be the 29500 support as a break below it should lead to a selloff into the
28475 level. The buyers will need the price to break above the 30K level to have
more conviction and pile in for a ride towards the 31K high.

Bitcoin Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
have a minor trendline that
is providing some support for the buyers. This is where the buyers may start to
pile in for another try for a break higher. As previously mentioned, a break
below the 29500 level would be ominous for the buyers and most likely lead to
more selling pressure.

Upcoming Events

This week the
main events will be the US CPI and Jobless Claims reports tomorrow. For the US
CPI, the market is likely to focus more on the Core readings as this is what
the Fed is more interested in. Higher than expected data may lead to a risk off
sentiment as the market should start to price in a more hawkish Fed and it
might weigh on Bitcoin as well. On the other hand, lower than expected readings
may lead to a risk on sentiment due to the soft-landing narrative and no more
rate hikes and support the cryptocurrency. At the same time of the US CPI data,
we will also see the latest US Jobless Claims report, which might have an even
bigger effect if the data shows a big surprise. In fact, a miss may cause
recessionary fears and lead to a selloff in Bitcoin, while a beat may be taken
as bad news because the Fed may keep on hiking.

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