Yen surges broadly while Dollar is under some pressure as US stocks are in steep selloff. Industrial giant 3M is the key driver in the markets as it slashed 2019 full-year guidance and announce 2000 job cuts. It’s more than enough to offset the lift by Microsoft, which reported healthy quarterly results yesterday.
At the time of writing, DOW is already down -253 pts, or 0.95%. S&P 500 is down -0.40%. NASDAQ made new record high at 8151.84 but quickly retreated and is down -0.27%.
We’d noted before that we’re not convinced that US stocks are ready to resume long term up trend. Risk of reversal, at least for near term, is high with S&P 500 and NASDAQ close to record highs. Break of 2891.90 support in S&P 500 will bring pull back to 55 day EMA (now at 2825.33). Similarly, break of 7950.97 in NASDAQ will bring pull back to 55 day EMA (now at 7710.88.
DOW has been the under performer comparing with the other two major indices. With today’s gap down, focus will be on 26070.83. Break will be the first sign that rise from 21712.53 has completed, ahead of 26951.81 record high, on bearish divergence condition in daily MACD. Deeper fall should then be seen, at least, to 38.2% retracement of 21712.53 to 26695.96 at 24792.29. Such development would drag down USD/JPY, as well as other Yen crosses. But we wouldn’t expect it to prompt deep selling in Dollar elsewhere.
