The conjecture here is that a Russian bomb has either deliberately or accidentally landed in Poland. There has been some light selling in risk assets on this.

Update: Polish police now say it was a weather balloon.

Meanwhile Medvedev is on Russian TV saying „Ukraine is certainly Russia“ with this map shown in the background.

This article was written by Adam Button at www.forexlive.com.

Last
Friday, the Dow Jones broke a key resistance zone despite a much weaker than
expected ISM
Manufacturing PMI. The market probably took it as good news because
it reduces the chances of the Fed eventually being forced to resume tightening.
In fact, the US Dollar and the Treasury yields fell across the board giving the
stock market a boost. The path of least resistance remains to the upside until
we start to see a deterioration in growth or the labour market cracks.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones
price action has formed a rising wedge with the
price diverging with the
MACD. This is
generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, the pullbacks should resolve around the bottom trendline where we
can expect the buyers to step in to target new highs. The sellers, on the other
hand, will want to see the price breaking lower to confirm the reversal and
target the 37128 level.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that
the price recently bounced on the red 21 moving average as the
buyers leant on the moving average to position for a rally into new highs. If
the price fails to sustain the bullish momentum and falls into the trendline,
the buyers will find the 50% Fibonacci
retracement level for extra confluence. A
break below the bottom trendline though would invalidate the bullish setup and
likely trigger a selloff into the 37128 level.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
price broke through the resistance zone
around the 39000 level last Friday. This is where we can expect the buyers to
step in on a retest as they will also find the red 21 moving average for
confluence. The sellers, on the other hand, will want to see the price breaking
lower to position for a drop into the bottom trendline and target a break below
it with a better risk to reward setup.

Upcoming Events

This week we have lots of important events on the agenda
with the release of the US labour market data and the Fed Chair Powell
testifying to Congress. We begin tomorrow with the US ISM Services PMI. On
Wednesday, we have the US ADP, the US Job Openings and the Fed Chair Powell
speaking. On Thursday, we get the latest US Jobless Claims figures, while on
Friday we conclude the week with the US NFP report.

This article was written by FL Contributors at www.forexlive.com.

The S&P 500 rose 41 points to a record 5137 on Friday but it has given some back in the pre-market. Futures are down 6 points with Nasdaq futures similarly down 0.1%.

“The recent rally has driven the share of market cap in stocks with extremely high valuations to levels similar to those reached during the euphoria of 2021,” wrote Goldman Sachs equity strategists. “But the prevalence of extreme valuations today looks far less widespread than in 2021 after adjusting for market concentration.”

The S&P 500 has risen 25% since late-October as the market enthusiastically embraces AI. In addition, a Fed put is in play. If the economy stay strong, then the market can cheer on a strong economy. If the economy softens, the Fed will cut rates. On Friday a trio of soft economic data releases — ISM manufacturing, construction spending and UMich consumer sentiment — led to a rate-cut inspired rally.

This week the stakes are higher with ISM services data, Friday’s non-farm payrolls report and two days of Powell testimony.

Here’s a chart from Goldman that suggests a FOMO rally could kick off at any time.

This article was written by Adam Button at www.forexlive.com.

On the H1 chart the crude oil didn’t break the 80.70 level of resistance and is now heading towards the 78.90 support. If that level doesn’t hold, the next target could be 77.35. On the upside the next level of resistance is at 81.70.

The fact that the OPEC+ output cuts were extended through Q2 was in line with expectations and didn’t support the crude oil during the day. The group noted that “these voluntary cuts will be returned gradually subject to market conditions”. Crude oil will likely be impacted in the near future by geopolitics with the attention mainly on the Gaza truce talks which according to Egyptian media are seeing significant progress.

This article was written by Gina Constantin at www.forexlive.com.