Dow falls further as AUD/USD continues to rise and US natural gas futures stabilise 

Macro Update

Crypto rally continues: A short-squeeze this week has reignited enthusiasm for cryptocurrencies, with Bitcoin heading for a fifth consecutive daily gain, up nearly 20% so far, while Ether has climbed over 25%.

Oil touches a one-month peak: Brent crude briefly approached $95 a barrel after the US threatened stricter sanctions on Iran, stoking fears of supply disruptions and adding to inflationary pressures.

Gold on track for third straight weekly rise: Gold is set for another weekly gain, buoyed by a softer dollar, falling real yields, and growing geopolitical and fiscal concerns.

Rate outlook stays split: Even as pricier oil fuels inflation worries, markets have pared back bets on imminent US and UK rate hikes, as weaker economic data and softer jobs numbers point to a more cautious policy path.

UK consumer sentiment picks up: GfK's survey showed UK consumer confidence hitting a two-year high in August, signalling growing optimism among households about big-ticket spending and the broader economy.

Bond yields stay high: US Treasury yields rose further, with the 30-year yield back near 5.25%, even as the Treasury tries to shore up the long end of the curve, keeping global borrowing costs and equity valuations under pressure.

Dow Jones drops further still

The Dow Jones Industrial Average has resumed its descent and is weighing on its March-to-August uptrend line at 52,764, a fall through which may lead to the mid-June high at 52,286 being reached.

Key support sits at the 51,547 July low as a fall through this level may indicate that a medium-term top is being formed.

Immediate resistance may now be seen around the late July high at 52,907 and the mid-July 52,930 peak.

Short-term outlook: bearish while below the 19 August high at 53,715

Medium-term outlook: bullish while above the 23 July 51,547 low

Dow Jones daily candlestick chart

AUD/USD trades at 2 1/2-month high

AUD/USD continues to surge higher, having smashed through the 61.8% Fibonacci retracement of the May-to-June decline at $0.7121 with the March peak at $0.7187 and the  78.6% Fibonacci retracement at $0.7189 thus being in focus.

This bullish move should remain in play while Wednesday's low at $0.7067 underpins.

Short-term outlook: bullish while above $0.7067

Medium-term outlook: bullish, targeting the $0.7200-to-$0.7300 region while the 6 August low at $0.7023 underpins

AUD/USD daily candlestick chart

US natural gas futures stabilise

US natural gas futures found support close to their May and early August lows at 253.2 on Monday and managed to hit a near one-month high at 274.9 before retreating once more.

Further sideways trading within the current August boundaries at 274.9-to-250.4 remains probable for the days ahead.

Short-term outlook: neutral while below the 19 August high at 274.9

Medium-term outlook: bearish while below the 23 July high at 289.4

US natural gas daily candlestick chart