English
Dow resumes ascent as EUR/JPY stabilises and US natural gas futures slide
Technical analysis of the Dow as it resumes its ascent while EUR/JPY stablises and US natural gas futures slide.
Macro update
Wall Street edges higher:
US equities finished with modest gains, with the Dow Jones up 0.07%, the S&P 500 adding 0.1% and the Nasdaq 100 rising 0.14%, recovering from earlier losses in a still-volatile session.
Tech rebounds but software lags:
The S&P 500 technology sector ended 0.5% higher, supported by NVIDIA and Apple, while software stocks fell 1.6% as concerns persisted over artificial intelligence (AI) disruption and rising competition from China’s Alibaba.
Financials lift, staples weigh:
Banks including Goldman Sachs and JPMorgan helped push financials higher, while consumer staples dropped 1.5% as General Mills slid 7% after cutting its full-year outlook.
Asia steadies despite AI uncertainty:
Japan’s Nikkei 225 gained 1.4% and Australia’s ASX 200 rose 0.5%, while US futures pointed slightly higher as investors weighed AI risks and awaited minutes from the Federal Reserve’s (Fed) January meeting.
Dollar firms, kiwi slips on RBNZ signal:
The US dollar index edged up as markets tracked US–Iran nuclear talks and Ukraine peace discussions, while the New Zealand dollar fell around 0.8% after the RBNZ held rates at 2.25% and signalled policy would remain accommodative for some time.
UK inflation cools further:
Headline consumer price index (CPI) eased to 3% in January from 3.4% in December - its lowest in 10 months - strengthening the case for a Bank of England (BoE) cut in March or April after unemployment rose to a five-year high.
Dow Jones recovers
The Dow Jones Industrial Average is seen bouncing off last week's low at 49,084 and is expected to try and break through its 7 to 22 January highs at 49,607 - 49,633. If overcome, the early February high at 49,653 may also be reached.
Further up sits the 9 February low at 49,837 which may act as resistance.
Short-term outlook:
Bullish while above 49,084.
Medium-term outlook:
Bullish while above the 20 January low at 48,428, targeting the 50,600 region.
Dow Jones daily candlestick chart
EUR/JPY stabilises
EUR/JPY stemmed its fall and has managed to remain above its current February low at ¥180.82 and is trying to rise above its ¥182.30 16 February high. If doing so, another up leg may take the cross towards the ¥183 region.
Failure at ¥180.82 would probably open the way for the 1 December low at ¥180.14 to be reached.
Short-term outlook:
Bullish while above the ¥180.82 current February low.
Medium-term outlook:
Neutral while above the 26 January low at ¥180.82 but a fall through it would change the outlook to a bearish one.
EUR/JPY daily candlestick chart
US natural gas futures weigh on key support
US natural gas futures prices continue to slide, having fallen through their $272.5 January low, so far to $269.8. If slid through, the mid-September-to-October 2025 lows at $256.2 - $254.7 may be reached next.
Downside pressure is expected to remain in play while no bullish reversal takes natural gas prices above their 12 February high at $301.00.
Short-term outlook:
Bearish while below 12 February high at $301.00.
Medium-term outlook:
Bearish, targeting the $250 region and below while below the 6 February $332.40 high.
Natural gas daily candlestick chart
Important to know
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Follow us online
