Dow nears record as EUR/JPY drifts lower and US natural gas futures hit 3-year high
Technical analysis of the DOW as it nears its record high while EUR/JPY drifts lower and US natural gas futures trade in 3-year highs.
Macro update
US equities hold steady:
US stocks finished broadly unchanged, with the S&P 500 and Nasdaq 100 inching higher as confidence in a Federal Reserve (Fed) rate cut next week remained steady, though a 1.4% decline in Amazon capped wider market gains.
Mixed labour-market signals:
Jobless claims unexpectedly fell to a three-year low, while a Chicago Fed model suggested unemployment stayed close to 4.4%.
Rate-cut expectations firm:
Markets now price an 87% probability of a 25bp move in December as the delayed payrolls report leaves investors relying on secondary data.
Broader sentiment stays constructive:
A softer dollar and rising confidence in Fed easing supported the market tone as traders awaited the delayed personal consumption expenditures (PCE) inflation release and next week’s policy decision.
Dow Jones rally is ongoing
The Dow Jones Industrial Average remains on an upward trajectory and flirts with the late October high at 48,040 which acts as short-term resistance.
If overcome, the November record high at 48,431 will be back in the frame.
Minor support sits at the 47,750 late November high.
Dow Jones daily candlestick chart
EUR/JPY comes off resistance
EUR/JPY is once more seen coming off the ¥181.50 region which has capped the upside these past few weeks, ahead of the multi-decade high at ¥182.00, hit on the 20 November.
It now weighs on the lower boundary of its two-week sideways trading range at ¥180.14. Together with the 21 November low at ¥179.78 it offers support.
While above this level, the short-term uptrend remains valid.
A rise and daily chart close above the ¥182.00 November peak would likely engage the (synthetic) June 1972 low at ¥182.47.
EUR/JPY daily candlestick chart
Natural gas futures trade in 3-year highs
US natural gas futures continue to surge higher and are on track for their fourth straight monthly gain with the October 2021 high at 485.0 representing the next upside target.
Minor support sits at the 4 December 438.4 low and can be seen along the uptrend line at 433.8.
Natural gas daily candlestick chart
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