Dow drops, EUR/JPY range trades, US natural gas hits 2 ½ month high 

Macro Update

Tech stocks extend winning streak: Strong consumer demand for AI applications continued to support semiconductor and memory stocks, with Samsung rising more than 2% and Taiwan’s benchmark approaching record levels, while the Nasdaq closed at an all-time high overnight, driven by gains in Micron and Sandisk.

Oil prices fall for sixth consecutive session: Brent slipped below $100 a barrel to around $98 after Saudi Arabia restarted its East-West Pipeline and offered Asian refiners additional crude, while hopes for a diplomatic resolution to the Iran conflict added to the selling pressure.

Dollar rises to two-month high: Expectations of further Federal Reserve tightening lifted the greenback to multi-week highs against the euro, sterling and Canadian dollar, with the euro hovering around $1.14 and sterling at $1.3316.

Two-year yields climb as rate-hike expectations build: The two-year Treasury yield reached 4.79%, its highest level since mid-2024, as futures priced in a 54% chance of an October rate increase after Fed officials backed last week’s hike, although the 10-year yield remained below 5%.

Gold weakens as rate outlook weighs: Spot gold slipped 0.3% to around $4,341 an ounce as a stronger dollar and expectations for higher interest rates for longer reduced the appeal of the non-yielding asset.

Trump-Xi meeting takes centre stage: Investors turned their attention to Thursday’s summit in Washington amid speculation that the US-China trade truce could be extended and cooperation on AI discussed, while Iran’s president was due to address the UN General Assembly with the possibility of talks between Tehran and Washington.

Dow Jones resumes descent

The Dow Jones Industrial Average seems to have resumed its descent, targeting the July low at 51,547, a fall through which would likely bring the March-to-September uptrend line at 51,450 into play. Further down sits the current September low at 51,192.

Were a bullish reversal to take the index above Tuesday's 52,324 high, the 22 July high at 52,516 and the more significant resistance area between the 25 June high, late August and early September lows at 52,661-to-52,760 may be revisited.

Short-term outlook: bearish while below the 22 September high at 52,324

Medium-term outlook: neutral while above the 16 September 51,192 low, a fall through which would change the forecast to a bearish one

Dow Jones daily candlestick chart

EUR/JPY range trades

EUR/JPY's recovery seems to be running out of steam with sideways trading below last week's ¥181.55 high being on the cards. For renewed upside to be seen, this level and ideally the May low at ¥182.05 would need to be exceeded. If so, the June trough at ¥183.17 may be back in sight.

Minor support may be spotted between the 11 September high and the August low at ¥179.54-to-¥179.38.

Short-term outlook: bullish while above the 17 September ¥178.47 low

Medium-term outlook: bullish while above the 14 September ¥177.37 low

EUR/JPY daily candlestick chart

US natural gas futures jump to 2 1/2 month high

US natural gas futures have gapped above their key 285.7-to-286.0 recent highs and resistance area and in doing so have made a 2 1/2 month high at 290.0, close to the 200-day simple moving average (SMA) at 292.4. The area around it may act as resistance, if reached. Were it to be exceeded, the psychological 300.0 region would be next in line.

Since previous resistance - because of inverse polarity - becomes support, the 286.0-to-285.7 area is expected to do so. Further potential support may be spotted around Tuesday's 283.6 high, the low point of this week's gap.

Short-term outlook: bullish while above the 22 September low at 270.0

Medium-term outlook: neutral with a bullish bias while above the 10 September high at 264.7

US natural gas daily candlestick chart