FTSE 100, GBP/USD drop further while US natural gas futures remain range bound
Technical analysis of the FTSE 100, GBP/USD as they drop further while US natural gas futures continue to sideways trade.
Macro update
Yen hovers near a 40-year low as intervention risks mount: The Japanese currency weakened to 161.81 per dollar overnight, its lowest level since July 2024 and close to the 1986 trough, with finance officials reiterating their willingness to counter speculative moves as thin market liquidity raises the possibility of intervention similar to the ¥11.7 trillion operations seen in April and May.
US markets closed for the Juneteenth holiday: American financial markets are shut in observance of the federal holiday, leaving cash Treasury markets closed and contributing to lighter trading volumes across global markets.
Federal Reserve outlook continues to support the dollar: Hawkish messaging from new Fed Chair Kevin Warsh lifted the dollar index to a 13-month high, widening yield differentials with Japan and reinforcing demand for yen-funded carry trades.
US-Iran negotiations stall as scheduled talks are cancelled: Vice President JD Vance withdrew from planned discussions in Switzerland, with the Swiss foreign ministry confirming the talks would not proceed, while Israeli military operations in southern Lebanon continued overnight.
Oil prices recover as doubts emerge over the peace process: Brent crude climbed back above $80 a barrel and WTI rose into the $76-$77 range after the collapse of the planned talks cast fresh uncertainty over the durability of the US-Iran agreement, reversing part of the week's earlier decline.
Burnham victory reshapes the UK political landscape: Andy Burnham's by-election win in Makerfield is seen as removing a significant obstacle to a potential Labour leadership challenge to Prime Minister Keir Starmer.
FTSE 100 remains under pressure
The FTSE 100 is on track for its third straight day of falling prices but even so remains close to its 55-day simple moving average (SMA) at 10,405.
With US markets being shut today, little volatility is expected to be seen ahead of the weekend.
For the bulls to regain the upper hand, a rise and daily chart close above Thursday's 10,496 high would need to occur. Only then would this week's high at 10,568 be back in focus.
Were Friday's intraday low at 10,353 to give way, the 7 April low at 10,329 may be retested. Further down sits the 1 June trough at 10,289 which may offer minor support.
Short-term outlook: neutral with a bearish slant while below the 15 June high at 10,568 but above the May low at 10,113
Medium-term outlook: neutral while above the 18 May low at 10,113 but below the May 10,573 high.
FTSE 100 daily candlestick chart
GBP/USD drops to late March low
EUR/USD's decline accelerated and has taken the cross to its late March trough at $1.3160 which has acted as support and from which we are seeing a minor recovery unfold. Should it be able to be sustained, a gradual rise towards the 18 May-to-8 June lows at $1.3303-to-$1.3306 may ensue in the days ahead.
A fall through and daily chart close below $1.3303 may lead to the $1.3250 region being revisited in the first instance.
Short-term outlook: bearish while below $1.3461 but is trying to stabilise above $1.3303
Medium-term outlook: neutral while trading within its $1.3160-to-$1.3658 March-to-May boundaries; failure at $1.3160 would be bearish and target the $1.3300 region
EUR/USD daily candlestick chart
US natural gas futures range trade
US natural gas futures continue to sideways trade below their recent 322.8-to-323.8 peaks. While the April-to-June uptrend line at 292.0 continues to hold, further range trading remains on the cards.
While this is the case, the recent highs at 310.4 and 311.7, as well as the 200-day simple moving average (SMA) at 313.4 may be revisited.
A slip through the uptrend line at 292.0 would likely push the mid-February highs at 289.9-to-287.9 to the fore. Slightly further down lies the early February low at 286.5.
Short-term outlook: neutral while below the 10 June high at 311.7 but above the 286.2 mid-June low
Medium-term outlook: bullish while above the 25 May low at 267.4
US natural gas daily candlestick chart
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