Comprehensive Brent Oil Analysis for October 3, 2023

In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the Brent Oil (UKOUSD) for 3rd October 2023. 

Key Takeaways

Key Point: The lifting of the U.S. government shutdown crisis, coupled with robust PMI data, has driven the U.S. dollar index to 107, a level not seen since November last year. This surge in the dollar’s strength has led to a sharp decline in non-U.S. currencies and a corresponding dip in crude oil prices, reaching three-week lows.

• Increased OPEC Production: Notably, OPEC’s oil production increased by 120,000 barrels per day in September compared to August, reaching 27.73 million barrels per day for the second consecutive month.
• Bearish Sentiment Emerges: Concerns over increased supply and the impact of high interest rates on demand have prompted bearish sentiment in the crude oil market.

Brent Oil Technical Analysis

Brent Oil Daily Chart Analysis

( Daily chart of BRENT OIL, source: Ultima Markets MT4) 

Key Point: The daily chart reveals a rapid decline in crude oil prices, signaling a strong bearish trend.

Stochastic Oscillator Signals

Key Point: Stochastic oscillator technical indicators suggest a divergence from market prices, indicating a high probability of short-term bearishness.

Brent Oil 1 Hour Chart Analysis

(1hour chart of BRENT OIL, source: Ultima Markets MT4) 

Key Point: Recent significant volatility is observed on the 1-hour chart, with the ATR combination indicator signaling an effective breakthrough. Traders should exercise caution and monitor entry opportunities.

Pivot Indicator

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

Key Point: According to the pivot indicator in Ultima Markets’ MT4 platform, the central price of the day stands at 92.210. Technical outlook:

• Bullish Scenario: Above 92.210, with targets set at 92.951 and 95.175.
• Bearish Scenario: Below 92.210, with targets at 90.003 and 89.210.

---

Legal Documents 

Ultima Markets, a trading name of Ultima Markets Ltd, is authorized and regulated by the Financial Services Commission “FSC” of Mauritius as an Investment Dealer (Full-Service Dealer, excluding Underwriting) (license No. GB 23201593). The registered office address: 2nd Floor, The Catalyst, 40 Silicon Avenue, Ebene Cybercity, 72201, Mauritius. 

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.  

Copyright © 2023 Ultima Markets Ltd. All rights reserved. 

The Rise of NVIDIA: A Dominant Force in IC Design

In the fast-paced world of integrated circuit (IC) design, the tides are constantly shifting, and the recent performance of the industry’s top players has been nothing short of remarkable.

According to TrendForce reports, fueled by an AI-driven inventory stocking frenzy across the supply chain, 2Q23 revenue for the top 10 global IC design powerhouses soared to US $38.1 billion, marking a 12.5% quarterly increase.

In this rising tide, NVIDIA seized the crown, officially dethroning Qualcomm as the world’s premier IC design house, while the remainder of the leaderboard remained stable.  

(2Q23 World’s top 10 IC design houses, TrendForce) 

NVIDIA: The New Kingpin

NVIDIA benefited from global CSPs (cloud service providers), internet company and enterprise generative AI, large-scale language model import application demands, and its data center revenue increased by as much as 105% quarterly.

In addition, revenue from gaming and professional visualization businesses also continued to grow, driven by new products.

Overall, revenue in the second quarter reached US$11.33 billion, a quarterly increase of 68.3%.   

Qualcomm’s Challenges

Qualcomm’s Q2 took a hit as the Android smartphone sector grappled with dwindling demand and Apple’s modem pre-purchases resulted in a subdued seasonal rhythm.

Consequently, their revenue slid by 9.7%, rounding off at about US$7.17 billion. 

Broadcom’s Mixed Bag

Broadcom benefited from the sales of high-end switches and routers catalyzed by generative AI, its NetCom business increased by about 9% quarterly.

However, offset by the decline in server storage, broadband, and wireless business, the second quarter revenue was roughly the same as the previous quarter at about $6.9 billion.  

AMD’s Steady Stance

AMD’s overall second-quarter revenue was roughly the same as the previous quarter at about US$5.36 billion, due to the decline in gaming GPU sales and embedded business in the second quarter.  

The Outlook for IC Design Houses

Although the inventory levels of semi-companies have improved significantly compared with those in 1H23, the outlook for the second half of the year tends to be conservative because of the weak market demand.

It is worth noting that the wave of generative AI and large-scale language model deployment has emerged among Internet companies and private enterprises.

It is expected that AI will be more helpful to related supply chain operations in the second half of the year, and the average sales unit price of such products will be higher than that of consumer products.

As a result, the world’s top ten IC design revenue will continue to have double-digit quarterly growth in the third quarter, and the output value is expected to reach a new high. 

---

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. 

Comprehensive AUD/USD Analysis for September 28, 2023

In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of AUD/USD for 28th September 2023. 

Key Takeaways

• Australian Inflation: Australian inflation reached a notable 5.2% in September 2023, in line with market expectations. This marked a significant uptick since June and is primarily attributed to the depreciation of the Australian dollar and rising oil prices.
• Market Perception: The market’s consensus was that these inflationary pressures, while substantial, would not be adequate to persuade the RBA to pursue an interest rate hike strategy. As a result, the initial reaction in the currency markets was mixed. The Australian dollar experienced a short-lived appreciation, but the prevailing sentiment soon led to a decline.

Short-Term vs. Long-Term Impact

• Short-Term Outlook: The short-term Australian data had a limited impact on the currency pair. Market attention swiftly shifted to the United States, with a specific focus on the core PCE data. Should this data continue to show an upward trend, it could maintain the possibility of interest rate hikes during the year, consequently bolstering the US dollar.
• Budgetary Concerns: However, the situation in the United States presents a significant variable. The fiscal year for 2023 is concluding, and if political parties fail to reach an agreement on the budget, the risk of a government shutdown looms large. In such an event, the market may seize the opportunity to speculate on a weakening US dollar.

Technical Analysis

AUD/USD Daily Chart Analysis

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

Significant Decline: The daily chart indicated an expected decline in the exchange rate following the inflation data release. Subsequently, the market exhibited a distinctive Wolfe wave pattern, which carries the potential for a substantial rebound. It’s important to note that this pattern does not signify a definitive trend reversal at this stage.

AUD/USD 4-Hour Chart Analysis

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

Divergence Structure: Transitioning to the 4-hour chart, the price decline led to the formation of a stochastic divergence pattern. This suggests that sellers may find motivation to close their positions and exit at the support level. Observing the influence of the 33-period moving average is crucial.

AUD/USD 1-Hour Chart Analysis

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

Critical Zone: Within the 1-hour timeframe, the area around 0.63853 is a crucial support and resistance conversion zone. This level is also proximate to the 65-period moving average. A potential breakout above this resistance level may pose challenges for the Australian dollar in maintaining its downward trajectory for the day.

Pivot Indicator

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

Key Price Levels: According to the pivot indicator within Ultima Markets MT4, the central price for the day stands at 0.63638.

• In bullish scenarios above this level, the first target is 0.63977, and the second target extends to 0.64422.
• In bearish scenarios below 0.63638, the first target is 0.63204, with the second target at 0.62868.

---

Legal Documents 

Ultima Markets, a trading name of Ultima Markets Ltd, is authorized and regulated by the Financial Services Commission “FSC” of Mauritius as an Investment Dealer (Full-Service Dealer, excluding Underwriting) (license No. GB 23201593). The registered office address: 2nd Floor, The Catalyst, 40 Silicon Avenue, Ebene Cybercity, 72201, Mauritius. 

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.  

Copyright © 2023 Ultima Markets Ltd. All rights reserved. 

How Supply Chain Tensions Impact Crude Oil Prices in October 2023

The American Petroleum Institute’s weekly statistical report shows that U.S. crude oil inventories increased by 1.586 million barrels in the week ending September 22, 2023, after a decrease of 5.25 million barrels in the previous week.

WTI crude futures rebounded to $90.7 a barrel, hovering at their highest level since November. The prospect of tight supplies helped markets shake off worries about rising interest rates and their impact on the economy.

The $90 pivot point is psychologically important and reinforces the belief that the market is poised for further upside.

Additionally, crude oil tends to perform well in inflationary environments as investors seek refuge in tangible assets rather than currencies. 

(United States API Crude Oil Stock Change) 

(WTI crude Daily chart) 

---

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. 

Comprehensive AUD/USD Analysis for September 27, 2023

In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the AUD/USD for 27th September 2023. 

Key Takeaways

Fundamentally, our analysis centers on the forthcoming release of Australia’s August CPI data and its potential repercussions for the AUD/USD market. Key takeaways include:

• Inflation Expectations: Market consensus points to a potential inflation rise from 4.9% in July to 5.2% in August, fueling discussions on impending interest rate hikes.
• Drivers of Inflation: The depreciation of the Australian dollar and escalating oil prices are identified as the driving forces behind the expected inflation surge.
• RBA’s Dilemma: The Reserve Bank of Australia (RBA) faces the pivotal decision of whether to implement interest rate hikes, with market expectations influencing their stance.
• Market Reaction: Anticipate a post-data release rebound in the Australian dollar, though the sustainability of this uptrend remains uncertain.

AUD/USD Technical Analysis

AUD/USD Daily Chart Analysis

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

On the daily chart, the U.S. dollar index has exhibited a notable upward trajectory. Key technical observations include:

• Breakthrough: The U.S. dollar index has closed above the upper boundary of its consolidation range.
• Stochastic Oscillator: An upward cross on the stochastic oscillator underscores the bullish trend in the U.S. dollar index.

AUD/USD 4-hour Chart Observations

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

Shifting focus to the 4-hour chart, we identify essential technical aspects that inform market dynamics:

• Previous High Breakthrough: Following a 12-day consolidation phase after the U.S. dollar index surpassed its previous high on September 5, it has continued its upward course.

1-hour Chart and ATR Combination Indicator

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

The 1-hour chart and the ATR combination indicator offer granular insights into the market:

• Breakthrough Effectiveness: The ATR combination indicator supports the effectiveness of the U.S. dollar index breakthrough.
• Potential Retracement: During the Asian session, a retracement is anticipated, necessitating patience from traders. The initial target is set at 105.443.

Pivot Indicator Analysis

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

Ultima Markets MT4’s pivot indicator serves as a vital reference point for traders:

• Central Price: The central price for the day is positioned at 105.527.
• Bullish Scenario: A bullish outlook prevails above 105.527, with the first target at 105.874 and the second target at 106.123.
• Bearish Scenario: Conversely, in a bearish scenario below 105.527, the first target is 105.282, with the second target at 104.937.

Conclusion

Airlines Issue Profit Warnings as Cost Pressure Rises 

Last week, American Airlines and Spirit Airlines joined other airlines in issuing profit warnings that rising costs would hit profits during the peak summer season, as airlines begin reporting third-quarter results in mid-October. 

Consequences for Airlines

American Airlines said it expects adjusted earnings per share in the third quarter to be between 20 cents and 30 cents, down from its previous forecast of 95 cents per share, citing higher fuel prices and new labor deals. The airline cut its operating profit margin in half from its forecast earlier this summer to 4% to 5%. 

Spirit Airlines expects negative profit margins of up to 15.5% in the three months ended September 30, down from its previous forecast of -5.5% to -7.5%. The airline also lowered its revenue forecast for the third quarter. 

Frontier Airlines said, “In recent weeks, sales have been trending below historical seasonality patterns” and forecasted an adjusted loss for the quarter. The airline’s shares hit a 52-week low. 

Outlook for the Industry

Airlines have lost the pricing power they gained last summer as lockdown eased and capacity constrained. Now they face a slow season when travel demand traditionally slows.

Fare tracking company Hopper said: “Fare prices are expected to continue to decline during the fall off-season, with domestic U.S. fares averaging $211 in September and October, down 30% from the summer peak.” 

(Global Airlines ETF ticker: JETS, US Global Investors) 

Conclusion

The airline industry finds itself at a critical juncture, navigating through a turbulent environment marked by rising costs, shrinking profit margins, and waning pricing power.

The third-quarter results will serve as a litmus test, shedding further light on the industry’s ability to adapt and prosper in the face of these formidable challenges.

As stakeholders watch closely, adaptability and resilience will be key to ensuring a successful flight through these trying times.

---

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. 

Comprehensive USDX Analysis for September 26, 2023

In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the USDX for 26th September 2023

Key Takeaways

The Federal Reserve’s stance has emerged as the linchpin shaping the USDX’s performance.

While September saw a halt in interest rate hikes, the dot plot projections signal a potential resurgence in rate increases later in the year.

This is underpinned by a forthcoming, more hawkish monetary policy in the next year, with a notable reduction in the number of projected interest rate cuts.

USDX Technical Analysis

USDX Daily Chart Insights

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

Turning our focus to the technical landscape, the USDX exhibits compelling upward momentum.

The daily chart reveals a breakthrough as the US Dollar Index’s price closes above its consolidation range’s upper boundary.

Moreover, the stochastic oscillator, a pivotal technical indicator, has signaled a bullish trajectory.

USDX 1-Hour Chart Analysis

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

The one-hour chart presents a more granular picture, with the ATR combination indicator affirming the effectiveness of the recent breakthrough.

Although retracement is conceivable during the Asian trading session, a market rebound is anticipated. The initial target is fixed at the support price of 105.443.

Ultima Markets Pivot Indicator

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

Ultima Market’s MT4 pivot indicator designates the day’s central price at 105.527. For investors and traders, here are the essential projections:

Bullish Scenario:

• Bullish above 105.527
• First target: 105.874
• Second target: 106.123

Bearish Scenario:

• Bearish below 105.527
• First target: 105.282
• Second target: 104.937

These projections, though subject to market dynamics and emerging data, provide a compass for navigating the ever-evolving terrain of financial markets.

Conclusion

The Bank of Japan’s Monetary Policy: Prioritizing Stability and Inflation Targets

The Bank of Japan (BoJ) maintained ultra-low interest rates on Sep. 22 and its pledge to keep supporting the economy until inflation sustainably hits its 2% target, suggesting it was in no rush to phase out its massive stimulus program. 

In terms of inflation data for August, Japan’s core CPI, excluding fresh food, came in at 3.1%, above the Bank of Japan’s target of 2% for the 17th month in a row. Another core-core CPI which excludes volatile fuel prices and fresh food, reached 4.3%. Higher import costs boosted the inflation.  

Yield Curve Control: A Pillar of Stability

The BOJ’s yield curve control program remains intact, with short-term interest rates at minus 0.1% and 10-year Japanese government bond yields guided around zero percent. 

Governor Kazuo Ueda’s recent hint at ending negative interest rates if prices and wages rise added another layer of complexity to the discussion. Ueda suggested that sufficient information and data would be available by year-end to facilitate a decision. 

(Japan CPI YoY% & 10Y JGB Yield) 

Conclusion

In summary, the Bank of Japan’s decision to maintain ultra-low interest rates, even in the face of rising inflation, exemplifies a resolute commitment to steering the nation’s economy on a stable course.

By prioritizing stability and economic growth, addressing the persistent inflation challenge, and fostering transparency in decision-making, the BoJ assures its continued role in Japan’s economic journey.

Governor Kazuo Ueda’s hint at potential changes in policy adds a layer of anticipation to the financial landscape.

As the situation evolves, market participants and analysts will remain vigilant, as this strategic decision’s impact unfolds.

---

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. 

Comprehensive USD/CNH Analysis for September 22, 2023

In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the USD/CNH for 22nd September 2023.

Key Takeaways

The Federal Reserve’s Decision: In September, the Federal Reserve made a pivotal decision to halt interest rate hikes. The dot plot hints at the possibility of future rate increases.

Furthermore, the overall monetary policy for the upcoming year leans towards a more hawkish stance, with a shift from an anticipated 5 interest rate cuts to just 2.

These factors collectively maintain the US dollar’s dominance, momentarily placing non-US currencies at a disadvantage.

USD/CNH Technical Analysis

USD/CNH Daily Chart Signals

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

Rebound and Candle Pattern: Our analysis of the daily chart reveals an interesting rebound in the USD/CNH pair after reaching the 33-day moving average.

This rebound pattern closely resembles a head and shoulders candle formation. This chart development signifies a potential right shoulder formation.

USD/CNH 4-Hour Chart Dynamics

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

Rebound Magnitude: Transitioning to the 4-hour chart, we observe that the recent rebound of USD/CNH has reached a significant level, approximately 1.618 times the rebound height recorded on September 14.

It is vital to keep a close watch on market movement below the 65-period moving average to gain insights into the conclusion of the market rebound.

Insights from the 1-Hour Chart

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

Equilibrium in the Market: On the 1-hour chart, the moving average remains a pivotal support for the market.

The stochastic oscillator hovers around the middle area at 50, indicating an equilibrium between bullish and bearish sentiments.

To confirm the initiation of short positions, a market movement below the moving average group is crucial.

Ultima Markets Pivot Indicator

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

Key Price Level: According to the pivot indicator in Ultima Markets MT4, the central price for the day stands at 7.31286.

A bullish sentiment prevails above this level, with the first target at 7.32288 and the second target at 7.33139.

Conversely, a bearish stance is favored below 7.31286, with the first target at 7.30435 and the second target at 7.29450.

Conclusion

Main Point: ASX 200 Index’s Recent Decline

The ASX 200 Index tumbled 1.3% to below 7,000 on Sep. 22, hitting its lowest levels in six months and tracking losses on Wall Street overnight as the US Federal Reserve’s hawkish pause continued to weigh on investor sentiment.

The benchmark index is also on track to lose nearly 5% this week for its second consecutive weekly decline. Domestically, investors digested data showing Australia’s manufacturing activity contracted further in September, while services activity turned expansionary.

Impact on Key Sectors

Commodity-linked stocks led the decline with sharp losses from BHP Group (-2%), Rio Tinto (-2.3%), Fortescue Metals (-2.2%), Woodside Energy (-0.9%) and Newcrest Mining (-0.9%). Heavyweight financial, technology, and consumer-related firms slumped as well. 

(ASX 200 Index daily chart) 

The Judo Bank Flash Australia Manufacturing PMI

The Judo Bank Flash Australia Manufacturing PMI fell to 48.2 in September 2023, from 49.6 in the previous month, flash estimates showed. It pointed to the lowest reading in 4 months, indicating continued deteriorating business conditions across the sector.

Inflation and Pricing Strategies

A sharper fall in new orders led to manufacturing output shrinking for a tenth straight month in September. Consequently, firms reduced their purchasing activity and inventory holdings.

That said, employment levels rose with some manufacturers still facing a shortage of labor to support ongoing operations. Staffing constraints also led to a marginal lengthening of lead times.

Input cost inflation eased amid the drop in purchasing activity, while firms also raised their own selling prices at a slower rate. 

(Judo Bank Australia Manufacturing PMI, S&P Global) 

Implications and Conclusion

In conclusion, the ASX 200 Index’s recent nosedive results from a complex interplay of domestic and international factors.

The US Federal Reserve’s hawkish stance, along with domestic issues, especially the manufacturing sector’s contraction, has deepened economic uncertainties.

While challenges persist, businesses have demonstrated resilience in adapting to the evolving landscape.

In this volatile market, comprehending the intricacies of the ASX 200 Index’s journey is vital for investors and analysts alike.

---

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.