Dow Jones Futures Technical Analysis and Forecast

• Recent Performance: The Dow Jones Futures (YM1!) has experienced a significant sell-off, moving out of the upper trendline boundary of the long-term channel.
• Past Analysis Point: A previous recommendation was made near the red arrow, indicating an expected rise towards the upper channel line.
• Current Position: Despite my expectations (marked by the blue „X“), the price reversed before reaching the anticipated resistance area, showing even a gerate bearish force.
• Support and Resistance: Key support is identified around 38,000, with potential resistance at 40,000 if the price attempts a recovery.
• Market Outlook: Traders should watch for consolidation within the channel or further breakdown below current levels, indicating more downside potential.

Stay updated with our latest technical analysis and forecast for more insights into the Dow Jones Futures movements. For more information, visit ForexLive.com. Trade at your own risk.

This article was written by Itai Levitan at www.forexlive.com.

Headlines:

• Euro nudges a little lower after the data releases
• Why the markets went into risk-off yesterday?
• Stocks stay on the defensive so far on the session
• BOJ’s Adachi: Will respond if FX moves have material impact on economy, prices
• Germany May Bavaria CPI +2.7% vs +2.5% y/y prior
• Germany June GfK consumer sentiment -20.9 vs -22.5 expected
• France May consumer confidence 90 vs 91 expected
• Eurozone Money Supply M3 Y/Y 1.3% vs. 1.3% expected
• Switzerland May UBS investor sentiment 18.2 vs 17.6 prior
• US MBA mortgage applications w.e. 24 May -5.7% vs +1.9% prior

Markets:

• USD leads, AUD and NZD lag on the day
• European equities lower; S&P 500 futures down 0.7%
• US 10-year yields up 3 bps to 4.571%
• Gold down 0.7% to $2,344.65
• WTI crude up 0.8% to $80.44
• Bitcoin down 0.7% to $67,803

The risk mood is staying more cautious today, after having soured in US trading yesterday. The selloff in bonds was a trigger and that continued a little today, with yields sitting higher across the board.

Equities are pinned down once again while the dollar is slightly bid after some light changes earlier to start the session.

EUR/USD is down 0.2% to 1.0835 with USD/JPY holding at 157.20 levels after a brief dip to 157.00 at the end of Tokyo trading.

The commodity currencies are the laggards amid the dour risk mood. AUD/USD and NZD/USD are both down 0.3% to 0.6628 and 0.6123 respectively.

There wasn’t much else for traders to work with on the economic calendar. German inflation looks to be coming in more or less in line with estimates, but perhaps slightly on the softer side. That said, it doesn’t change up the ECB narrative for next week and the overall outlook for now at least.

In the commodities space, we’re seeing metals drop back with gold down 0.7% to $2,344 and silver retreating back under $32 to $31.90 now. Copper is also easing back, down a little over 1% to under $4.79 per pound.

This article was written by Justin Low at www.forexlive.com.

The second annual Financial Achievements in Markets Excellency awards (FAME) ceremony took place on the 21st of May 2024 in Sandton City, South Africa. These awards have established themselves as a standard for excellence in the financial services space, recognizing some of the top performing companies.

Several of the industry’s leading brands attended the FAME ceremony, following at the conclusion of Day 1 of the Finance Magnates Africa Summit (FMAS:24) at the Sandton Convention Centre. A total of thirteen awards were given out, covering several prestigious titles and achievements in Africa in 2024.

FAME – Africa’s Gold Standard of Excellence

The FAME awards have quickly become some of the most sought-after titles, especially in Africa. As the financial services space continues to grow at a breakneck pace, many individuals and companies look at these awards as a stamp of approval and example of who to do business with.

Africa itself has shown extraordinary growth with the retail trading scene taking sizable leaps in recent years. With no sign of slowing down and renewed interest in the continent, reinforced by strong growth potential, favorable demographics, and myriad talent, Africa’s best days in the trading sphere look to be ahead.

Each of the winners of this year’s FAME awards has demonstrated excellence in the financial markets in Africa. These companies have also showcased unparalleled commitment, innovation, and leadership in their respective industries. These awards signal to everyone that these companies are the most reputable for both trading and business.

This year’s winners include the following brands:

Best CFD Broker in Africa – iFX Brokers

Best ECN/STP Broker in Africa – FXView

Best Multi-Asset Broker in Africa – Exness

Fastest Growing Broker in Africa – TradingPro

Best Forex Spreads in Africa – TradingPro

Best IB/Affiliate Program in Africa – XM

Best Trading Experience in Africa – FP Markets

Best Customer Service in Africa – iFX Brokers

Most Trusted Broker in Africa – Exness

Best Copy Trading Broker in Africa – HF Markets

Most Reliable Broker in Africa – ATFX

Most Client-Oriented Broker in Africa – FBS

Best Trading Conditions in Africa – Octa

Fastest Execution Broker in Africa – Bold Prime

Most Innovative Broker in Africa – Amega

All 2024 FAME Winners

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

• Prior +1.9%
• Market index 190.3 vs 201.9 prior
• Purchase index 138.4 vs 140.0 prior
• Refinance index 463.8 vs 536.9 prior
• 30-year mortgage rate 7.05% vs 7.01% prior

The main cause for the drop in mortgage applications in the past week is a big decline in refinancing activity. It comes after a bit of a bounce in recent weeks. But if anything else, it reaffirms that the housing market is still soft-ish.

This article was written by Justin Low at www.forexlive.com.

Fundamental
Overview

Crude oil has been falling
steadily since topping around the $87.50 level following the mutual
retaliations between Iran and Israel. The drop has been kind of a
head-scratcher as the market didn’t respond positively to the global growth
expectations amid China and other major central banks policy easing, improving
PMIs and OPEC+ extending the voluntary production cuts until the end of the
year.

More recently though, crude
oil finally caught a sustained bid triggered by the strong US
PMIs last week and added to the gains yesterday following the strong US
Consumer Confidence report. Looking ahead, positive growth and sentiment
should be tailwinds for the market, but we will need to crack a strong
resistance first to gain some more conviction.

Crude Oil
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that crude oil recently bounced around the bottom of the 80-76 range and extended
the rally following the break of the trendline.
The price is now trading right at the key 80-81 resistance.

This is where the sellers
will likely step in with a defined risk above the resistance to position for a
drop into new lows. The buyers, on the other hand, will want to see the price
breaking higher to increase the bullish bets into new highs.

Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the resistance with the 38.2% Fibonacci
retracement level adding some extra confluence.
The price has been ranging between the 80 resistance and the 77 support and it
will be interesting to see if the recent data will be enough to trigger a
breakout to the upside or we keep trading inside this range.

Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that if this strong bullish momentum remains intact, the first support for
the buyers will be the steep trendline around the 80 level. A break below this
level should provide for a correction into the 38.2% Fibonacci retracement
level around the 79 level where we can also find the lower limit of the average
daily range. The sellers will likely increase the bearish bets on a break
below the trendline and target a drop back into the 77 support.

Upcoming
Catalysts

Tomorrow we will see the latest US Jobless Claims figures. On Friday, we conclude
the week with the Chinese PMIs and the US PCE report. Note that the OPEC+
meeting will be held on Sunday June 2nd where the group is expected
to extend the voluntary output cuts.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Fundamental
Overview

Copper has been rallying like crazy in the past few months amid a pickup in
global growth, Chinese stimulus measures and concerns over tightness in global
mine supply. Unfortunately, as it’s often the case, the rally attracted the
momentum players and the price got overstretched leading to an aggressive selloff without a clear catalyst.

All else being equal, if we keep seeing positive economic growth and maintain
the risk-on sentiment, we could see new highs in the months ahead with
the Chinese officials likely increasing the policy support if the data were to show
some deceleration.

Copper
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that copper experienced an aggressive correction to the downside after
setting a new all-time high. The price bounced and consolidated on the trendline
where we have also the 61.8% Fibonacci
retracement level for confluence.

This is where we can expect
the buyers to step in with a defined risk below the trendline to position for a
rally into a new all-time high. The sellers, on the other hand, will want to
see the price breaking lower to increase the bearish bets into the 4.47 level.

Copper Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the consolidation between the trendline and the 4.85 level. A
breakout to the upside should see the buyers gaining more conviction and
increase the bullish bets into a new all-time high. On the other hand, a
breakout to the downside will likely trigger another selloff with the sellers aiming
for the 4.47 level as the first target.

Copper Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see even better the current rangebound price action between the 4.75 support
and the 4.85 resistance. Note that we have another support at 4.70, so if we
were to see the price dropping below the 4.75 support it wouldn’t yet signal more
downside to come.

Upcoming
Catalysts

Today we get the US Consumer Confidence report where the
focus will likely be on the labour market details. On Thursday, we will see the
latest US Jobless Claims figures. Finally on Friday, we conclude the week with
the Chinese PMIs and the US PCE report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Headlines:

• Latest inflation data points to worries that the BOJ is running out of time
• ECB’s Centeno: Interest rate reduction process is about to begin
• Fed’s Kashkari: No hurry to cut interest rates
• Fed would have benefited from earlier decision to taper, end QE in 2021 – Bowman
• Germany April wholesale price index +0.4% vs +0.2% m/m prior
• UK May CBI retailing reported sales 8 vs -44 prior
• China president Xi urges promoting high-quality and sufficient employment conditions
• Are precious metals set for a stronger bounce this week?

Markets:

• CHF leads, USD lags on the day
• European equities lower; S&P 500 futures up 0.1%
• US 10-year yields down 0.6 bps to 4.466%
• Gold down 0.2% to $2,345.41
• WTI crude up 1.4% to $78.84
• Bitcoin down 2.0% to $68,242

It was a quiet session for major currencies with the dollar keeping marginally lower on the day.

The euro and the franc gained slightly, with EUR/USD moving back up to retest the April high of 1.0885. But offers and large option expiries at 1.0900 is keeping a lid on things for now. Meanwhile, USD/CHF moved back down by 0.4% to test the 0.9100 mark.

Besides that, the aussie and kiwi are also just a touch higher but nothing to really shout about. AUD/USD is up 0.2% to 0.6667 as it continues to recoup losses from last week.

In the equities space, stocks were more optimistic early on with S&P 500 futures moving up by 0.3%. But as we look towards US trading now, we’re seeing those gains pared back to just 0.1%. In Europe, major indices also opened higher but are now trading lower as the risk optimism is tempered with slightly.

As for commodities, gold and silver are getting a bit of a check back following yesterday’s gains. It isn’t much but it speaks to some mixed flows on the day even with the dollar looking sluggish still.

US traders will be back from the long weekend and will have to contend with month-end flows before more key US data later in the week.

This article was written by Justin Low at www.forexlive.com.

• Inflation is under control

Once again, it just reaffirms that we will see a rate cut at next week’s meeting. It will be more interesting to see their comments after that is over and done with.

This article was written by Justin Low at www.forexlive.com.

RISK SENTIMENT

Sentiment can be
described simply as the mood of the market. Sentiment should be the primary
concern for short-term traders.

It can last an hour, a
session, a day or weeks depending on what is causing it and how much importance
the market gives it. Thus, you have to identify the reasons why the market
behaves in a certain way.

Risk sentiment can be
fickle. You will see sometimes the market focusing on something and moving
accordingly but then suddenly something else happens and the previous concern
is completely forgotten.

You should also take note
of which session is driving the sentiment, because if you get some risk off in
the European session due to some negative piece of news, it doesn’t mean it
will be taken as equally negative in the North American session.

This may be due to
further reports calming down the waters or just not in line with the prevailing
theme, so it may be actually traded in the opposite direction in the new
session with traders taking advantage of better prices.

These swings in risk
sentiment are generally triggered by fundamental catalysts. That’s why it’s
vital that you keep yourself updated on the latest developments because
sentiment can go against the big picture fundamentals and if you are trying to
enter in line with the fundamentals but against the current sentiment, you may
find yourself in trouble with prices that keep going against you.

It’s better to align
sentiment with big picture fundamentals for the best results.

RISK-ON/RISK-OFF

The two types of
sentiment are risk-on and risk-off.

• Risk-on is when the market doesn’t see
  risks and you will often see risk assets like equities, commodities and commodity
  currencies rallying. Basically, assets that give a high yield or more bang for
  the buck.
• Risk-off, on the other
  hand, is when the market does see risks and goes for safer assets, like
  bonds, safe-haven currencies and so on.

Generally speaking, positive
economic growth or expectation of more growth leads to risk-on sentiment while a
negative growth picture triggers the risk-off regime.

WHY IT’S IMPORTANT?

Knowing the risk sentiment regime is fundamental. For example, if someone
were to tell you that the S&P 500 is up 5% on the day, you could guess that
the Australian Dollar or copper were also up on the day without even looking at
the charts.

One of the main reasons for such correlation is the economic
interrelationship between the various assets, which got stronger and stronger
with financial globalization.

The concept of risk sentiment is also very important in selecting the
assets that will move the most during different types of sentiment. For example,
during risk-on, you will see lots of stocks rallying but some of them will increase
much more than others. In the FX space, you might see emerging market currencies
appreciating faster and providing you with great carry trades.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Prior -44

The good news for the UK is that the retail sales balance is seen rebounding strongly in May. The headline reading is the highest since December 2020. Adding to that, the quarterly measure of selling price inflation in retail is seen slowing to its lowest since August 2020. It will be a welcome relief, if translated to the hard data, after the poor April report as seen here.

This article was written by Justin Low at www.forexlive.com.