Dow trades in record highs as GBP/USD range trades, US natural gas tests resistances

Macro update

Asian equities slide amid AI profit-taking and geopolitical concerns: MSCI’s Asia-Pacific index excluding Japan fell 1.8%, while South Korea’s Kospi tumbled as much as 7% and Japan’s Nikkei declined 1.6%, as investors reduced exposure to technology stocks following disappointing results from Broadcom and adopted a more cautious stance amid a lack of progress in US-Iran negotiations.

Nikkei pulls back from record levels: Japan’s benchmark retreated 1.6% after reaching a fresh all-time high, with technology-related shares leading the declines. Broader market strength helped limit losses, however, as real wages continued to rise, marking a fourth consecutive month of growth.

Oil remains supported as supply risks intensify: Brent crude climbed to $94 per barrel and remained on track for solid weekly gains, while WTI looked set for an even stronger advance. Prices were supported by fading hopes of a Lebanon ceasefire after Hezbollah rejected a US-backed proposal, while an explosion at Oman’s Mina al Fahal terminal heightened concerns over potential supply disruptions.

Iranian oil exports fall to multi-year lows: Shipping data indicated that Iranian crude exports have dropped to their weakest level since 2020 as ongoing disruption around the Straits of Hormuz and the US naval blockade continue to weigh on export flows.

Yen remains under pressure near key levels: The Japanese currency briefly touched ¥160 per dollar for a third consecutive session despite renewed warnings from Finance Minister Satsuki Katayama, who reiterated that authorities stand ready to respond to excessive market volatility. The yen is currently heading for a fourth straight weekly decline.

Focus turns to US payrolls as dollar and bitcoin diverge: The dollar index remains on course for a weekly gain, supported by safe-haven demand ahead of the latest US jobs report. In contrast, bitcoin extended its recent weakness, falling 1.4% and heading for its steepest weekly decline since the collapse of FTX in late 2022.

Dow Jones trades in record highs

The Dow Jones Industrial Average benefitted from the tech sell-off amid sector rotation, trading in record highs.

Further up sits at the 161.8% Fibonacci extension, taken from the 2020 low to 2022 high and projected higher from the September 2022 low, at 58,979.

Minor support may be spotted around the 2 June high at 51,375 and at the 50,835 22 and 27 May highs.

Short-term outlook: bullish while above the 20 May 49,241 low

Medium-term outlook: bullish while above the 29 April 48,709 low 

Dow Jones daily candlestick chart

GBP/USD range trades further

GBP/USD's continues to be supported by its 200-day simple moving average (SMA) at $1.3419 while range trading.

While last week's low at $1.3368 underpins, the late May high at $1.3485 may be revisited. If overcome, the 25 May high at $1.3509 would probably be next in line.

A fall through $1.3375 may lead to the $1.3300 region being revisited, though.

Short-term outlook: neutral while below $1.3509 but above $1.3368

Medium-term outlook: neutral while trading within its $1.3160-to-$1.3658 March-to-May extremes

GBP/USD daily candlestick chart

US natural gas futures capped by resistance

US natural gas futures' advance ran out of steam at 322.8, not far below its 323.8 early June peak. If overcome, the 6 February high at 332.4 may be reached next. Further up lies the 24 December 2025 high at 410.6.

Potential slips may find support along the 200-day simple moving average (SMA) at 311.7, ahead of the 13-to-19 March highs at 307.9-to-305.6.

Short-term outlook: bullish but so far capped by resistance at 322.8-to-323.8

Medium-term outlook: bullish while above the 25 May low at 267.4

US natural gas daily candlestick chart