Dow nears record high as EUR/JPY, US natural gas futures hit multi-year highs
Technical analysis of the Dow as it nears its record high while EUR/JPY and US natural gas futures hit multi-year highs.
Macro update
Asian equities firmer:
Asian markets edged higher after the Bank of Japan (BoJ) left rates unchanged, with the MSCI Asia ex-Japan index up 0.5% and the Nikkei 225 rising 0.3% as the decision met expectations.
BoJ tone under scrutiny:
The central bank lifted four of its six inflation forecasts, maintaining a hawkish bias and reinforcing market pricing for potential rate hikes later in 2026.
Yen and bonds steady:
The Japanese yen eased slightly to around ¥158.60 per US dollar, while the BoJ’s statement did little to address recent bond market volatility, keeping investors cautious despite stable conditions.
Wall Street lends support:
United States (US) equities extended their rebound after President Trump stepped back from tariff threats linked to Greenland, with the S&P 500 up 0.5% and the Nasdaq 100 gaining 0.9%, helping support risk appetite in Asia.
Dollar soft, metals strong:
The dollar hovered near its weakest levels of 2026 as Federal Reserve (Fed) futures priced a 96% chance of rates remaining on hold at the next monetary meeting, while gold, silver and platinum climbed to fresh record highs.
Commodities and crypto mixed:
Brent crude oil rose 0.9% to $64.61 despite easing geopolitical risks, while Bitcoin added 0.7% to just below $90,000, extending gains alongside broader risk assets.
Dow Jones nears record high
The Dow Jones Industrial Average is seen heading back up towards its January record highs at 49,616 - 49,633 and the psychological 50,000 mark.
Immediate upside pressure should remain in play while Tuesday's low at 48,428 underpins on a daily chart closing basis.
Short-term outlook:
Bullish, targets the 50,0000 mark while above 48,428.
Medium-term outlook:
Bullish while above the 2 January low at 47,853, targeting the 50,000 region.
Dow Jones Industrial Average daily candlestick chart
EUR/JPY hits multi-decade high
EUR/JPY once more hit a multi-decade high, this time at ¥186.87, close to the (synthetic) ¥186.41 December 1981 low. Short-term the cross may stall in this area.
If not, the (synthetic) January 1983 low at ¥187.57 and the August 1990 high at ¥187.61 may be reached next.
Minor support can be found at ¥184.92 - ¥184.43.
Short-term outlook:
Bullish while above ¥182.64, the 8 January low.
Medium-term outlook:
Bullish while above the 8 January low at ¥182.64.
EUR/JPY daily candlestick chart
Natural gas futures come off 3-year high
US natural gas futures shot up to 517.7 - a level last traded in December 2022 - due to an intense cold weather outbreak and a sharp shift in market expectations for heating demand. This pushed prices sharply up and triggered a strong short-covering rally among traders.
We expect a drift back down to ensue, provided that Thursday's peak at 517.7 caps on a daily chart closing basis. If not, the 616.9 November 2022 high may be reached next.
Minor support is seen around the 419.0 - 410.6 area and, further down, at the 25 November 399.9 low.
Short-term outlook:
Toppish while below 517.7, targeting the 400 region.
Medium-term outlook:
Bullish while above the 21 January 355.2 low.
Natural gas daily candlestick chart
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