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Dow30

Dow30-USD/JPY comparisonMajor part of the rally in US stocks since late 2012 appears to have been fuelled by Yen carry trade. Remember Bank of Japan was the first one to fire and the stage was set after Abe came to power. BOJ announced easing in April 2013 and followed it with another surprise in October 2014. BOJ's aggressive actions also forced ECB and other central banks to press the easing button. However, the situation now is Yen is not in mood to weaken, markets are not responding positively to aggressive central bank actions and oil has already doubled from its bottom in February. Moreover, oil helped indices recover from Feb lows even though funding currencies like JPY, EUR were on the rise. Hence, oil better stay resilient other wise, odds of a corrective move in Dow would rise. From technical perspective a break below rising trend line (black) could bring in chart driven bears as well.
FX:US30
by TipTVFinance
Dow outlook – Falling channel at risk of being breachedResistance – 17,758, 17,811 (Apr 1 high), 17,934 (May 10 high) Support – 17,638, 17,539 (23.6% of Feb low-Apr high), 17,418 (May 18 low). Daily chart pattern – Falling channel Sharp rally seen yesterday pushed up RSI back above 50.00. Given the futures are trading 70 points higher, the index is likely to open around 17,758 (channel resistance). Further gains towards 17,811 cannot be ruled out as risk sentiment is likely to stay intact (Greek crisis is out of the way). However, note that Greek deal also means one less hurdle in the way of Fed rate hike. The 2-yr treasury yield is above 0.90% and could near 1% and thus weigh over equity markets. Rejection/Failure to sustain above 17,758 (channel resistance) followed by a break below 17,638 could trigger fresh selling in the markets.
FX:US30
by TipTVFinance
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