Dow nears support as natural gas rally falters and EUR/JPY hits 1 ¼ year high
Technical analysis of the Dow Jones Industrial Average as it nears support following three straight days of coming off its record high, of the natural gas rally which falters and EUR/JPY as it hits a 1 ¼ year high.
Macro Update
Wall Street closed lower as stronger-than-expected economic data, including falling jobless claims and an upward gross domestic product (GDP) revision, cast doubt on the pace of Federal Reserve (Fed) rate cuts, with the Dow Jones down 0.4%, the S&P 500 0.5%, and the Nasdaq 100 0.5%.
Fed officials offered mixed signals, with Chicago’s Goolsbee cautioning against cutting too quickly, Trump appointee Miran pushing for sharper reductions, and Powell stressing balance between inflation and jobs.
In Asia, stocks retreated after Trump unveiled new tariffs on drugs, trucks, and furniture, while traders scaled back rate cut expectations, boosting the dollar.
Dow Jones comes further off record high
The Dow Jones Industrial Average has been coming off its 46,714 record high for three straight days and dipped to 46,122 on Thursday.
Support below this level may be found between the 5 September high at 45,770, the August peak at 45,757 and last week's low at 45,667. Were this area to be slipped through, a more significant retracement toward the July peak and early September low at 45,296-to-45,017 may ensue.
Resistance below the all-time high at 46,714 may be spotted around the 11 September peak at 46,137.
Dow Jones daily candlestick chart
EUR/JPY trades in 1 1/4 year highs
USD/JPY has so far risen to ¥174.94 whilst on its way to its July 2024 peak at ¥175.42 around which the current advance may at least short-term pause.
Potential slips may find support around the 19 September high at ¥174.50 and further down between the July and 8 September peaks at ¥173.91-to-¥173.90.
EUR/JPY daily candlestick chart
Natural gas futures bounce fizzles out
The recovery in US natural gas futures seems to have run out of steam close to the 55-day simple moving average (SMA) at 261.9.
While Friday's intraday high at 263.0 hasn't been overcome, recent downside pressure may resume with this week's low at 246.2 being in view. Failure there may lead to the August trough at 229.5 being eyed.
A rise above the 263.0 intraday high may lead to the June-to-August resistance line at 270.3 being revisited.
Natural gas daily candlestick chart
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