A Bullish August Finale Amid Mixed Economic Data

Hello traders, and welcome to Thursday, the final trading day of August. The macroeconomic calendar is rather sparse today, yet holds a few key data points that could influence market sentiment. China’s manufacturing PMIs started us off on a positive note, exceeding expectations at 49.7. Meanwhile, the Eurozone is awaiting flash estimates for inflation, expected to dip from 5.3% to 5.1%. The day will conclude with the core PCE price index from the U.S., forecasted to come in at 0.2%.

In a somewhat counterintuitive response to yesterday’s disappointing U.S. data, American stock indexes logged their fourth consecutive bullish day. The ADP non-farm employment change and preliminary GDP both missed their marks, coming in at 177,000 (below expectations) and 2.1% (compared to an expected 2.4%), respectively. Nonetheless, the S&P 500 surged to its highest levels since August 10th, and the Dow Jones continued its V-shaped recovery, bouncing off a long-term uptrend line. Nasdaq, not to be outdone, reached its loftiest levels since August 4th, breaking a mid-term downtrend line in the process.

On the currency front, yesterday’s biggest gainers were the British Pound and the Euro, while the losers were safe-haven currencies like the Japanese Yen, New Zealand Dollar, American Dollar, and the Swiss Franc. The market seemed to be in a risk-on mood, evident by the strength in currencies from Australia, Japan, and New Zealand—nations on the eastern hemisphere. The currency charts today indicate a continuation of the American Dollar’s drop against the Japanese Yen, as well as a bounce in the British Pound against the Swiss Franc—signaling a potential reversal from the lower line of its sideways trend.

As for commodities, Gold and Silver are currently challenging their mid-term downtrend lines. Although the initial tests have favored sellers, a breakout could switch the signals to bullish. And let’s not overlook the Oil market; WTI and Brent Crude are subtly but steadily targeting higher resistance levels at $83 and $88 per barrel, respectively.

Source: https://www.axiory.com/analytics/market-news/a-bullish-august-finale-amid-mixed-economic-data