Dow stays bullish as EUR/JPY comes off resistance and natural gas nears highs
Technical analysis of the Dow as it remains bullish while EUR/JPY comes off resistance and US natural gas futures near recent highs.
Macro update
Asian markets steady after turbulent month:
Regional equities firmed at the end of November as renewed expectations of a US rate cut offered support, even though markets remain sharply lower on the month.
Fed cut expectations ramp up:
Federal Reserve (Fed) funds futures now assign an 85% probability to a December rate cut, buoyed by dovish comments from senior policymakers despite data gaps caused by the prolonged US government shutdown.
CME outage rattles futures trading:
A technical issue at CME Group disrupted currency, commodity and Treasury futures, injecting volatility into an otherwise quiet session with US markets operating on shortened Thanksgiving hours.
Treasuries extend their rally:
Government bonds looked set for a fourth straight month of gains as traders priced in imminent easing, while the US dollar headed for its weakest week since July.
BoJ hike speculation rises:
Stronger-than-expected Tokyo inflation kept alive expectations of a potential Bank of Japan (BoJ) rate increase as early as next month, with the Japanese yen stabilising after touching a 10-month low.
Commodities mixed:
Gold pushed above $4,180.00 an ounce, up 4.5% for the month, while oil gained on the day but remained on track for a fourth consecutive monthly decline.
Dow Jones rally likely to continue
The Dow Jones Industrial Average swiftly reversed its short-term downtrend last week and has been surging higher over the past four straight days, aiming for new record highs.
The next upside target is the late October high at 47,718 while minor support may be spotted around the 21 October high at 47,125.
Dow Jones daily candlestick chart
EUR/JPY capped by resistance
EUR/JPY is seen coming off the ¥181.50 region which has capped the upside these past few days, ahead of the multi-decade high at ¥182.00, hit on the 20 November.
It now weighs on the one-month uptrend line at ¥180.98, a slip through which looks probable and would likely push the 21 November low at ¥179.78 to the fore.
While above this level, the short-term uptrend remains intact, though.
A rise and daily chart close above the ¥182.00 November peak would engage the (synthetic) June 1972 low at ¥182.47.
EUR/JPY daily candlestick chart
Natural gas futures flirt with November peak
US natural gas futures continue to bang against resistance made up of its 13, 21 and 25 November peaks at $416.30-to-$419.00. If bettered, the $485.00 October 2021 high may be next in line.
Support below the uptrend line at $408.00 may be found at the 25 November $392.80 low.
Natural gas daily candlestick chart
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