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Cooling from all-time highs, the Dow Jones (DJ30) trades 0.33% lower in today’s session, at around $46,594.

Having found support early August, US equities have staged a formidable rally since, despite a somewhat questionable cocktail of macroeconomic themes.

As always, let’s review some macro themes impacting US equity markets, and importantly, consider some potential price targets for this week’s trading.

Dow Jones (DJ30): Key takeaways 07/10/2025

• Staging an impressive rally despite a dubious fundamental outlook, the Dow Jones is retracing from all-time highs in today’s trading, with Caterpillar (CAT), Nike (NKE), and Salesforce (CRM) amongst the worst-performing constituents.
• Despite some downside in today’s session, sentiment on US equities remains generally positive, with complications to Fed monetary policy brought about by the US government shutdown positive for equity markets, somewhat counterintuitively.
• Otherwise, political uncertainty in major world economies, most notably Japan and France, is encouraging risk-averse investors to seek alternative forms of investment, somewhat benefiting US equities

Dow Jones 30 (US30USD), S&P 500 (SPX500USD) and Nasdaq-100 (NAS100USD) YTD, OANDA, TradingView, 07/10/2025

Dow Jones 30 retraces from all-time highs, snapping a six-day bullish streak

Despite the best efforts of ballooning sovereign debt, an ongoing government shutdown, and stock valuations rivalling the .com bubble, US equities remain at the highs

While the hive mind of the market is not typically known for its ultimate rationality in decision-making, the recent rally in US equity prices, including the Dow Jones, cannot be ignored.

Although prices have cooled somewhat, seemingly due to technical selling, all three major US indices, the Dow Jones 30, S&P 500, and Nasdaq-100, have recently posted all-time highs.

Let’s take a look at the major fundamental themes at play this week:

US government shutdown: As a precursor to the following theme, the US government shutdown should, at least in a vacuum, spell trouble for the current rally in equity pricing. Adding to market uncertainty, undermining confidence in the US government, and suspending non-essential government services, none of these outcomes would typically be viewed as a reason to hold US equities over an alternative.

S&P 500 historical price-to-earnings (P/E) ratio, Macrotrends, 07/10/2025

Fair to say, however, this has not been the case since Tuesday’s shutdown announcement, with prices renewing all-time highs since.

Market conviction on Federal Reserve easing path: While the notion that the Federal Reserve is becoming increasingly dovish is a pre-existing narrative, one of the many knock-on effects of the US government shutdown is further complications to Fed monetary policy.

CME FedWatch, 06/10/2025

Nailing their colours to the mast in 2025 and committing to following objective data when making rate decisions, the current government shutdown has suspended all collection and reporting of economic data by federal agencies, putting the Federal Reserve in a difficult position.

Naturally, it’s challenging to balance the dual mandate of stable pricing and employment when the most recent figures, particularly regarding their reaction to September’s 25-basis-point cut, are entirely unknown.

Ultimately, markets are predicting that a lack of economic data will force the Fed’s hand into performing a second back-to-back interest rate cut, especially considering that September’s NFP report left much to be desired, an outcome Fed Chair Powell will be keen to avoid repeating.

This holds true especially when considering that ADP payrolls, serving as our most recent and reliable private sector gauge of the US labor market, painted a less-than-stellar picture, losing 32,000 jobs in September.

As for US equities, we can consider any suggestion that rates will be lowered in upcoming decisions as positive for pricing, adding some rationale to recent upside.

Rising political uncertainty in major economies: As a brief aside, the change of leadership in Japan and the recent resignation of the French prime minister are contributing to global political uncertainty.

While I’m hesitant to say the United States equity market has entirely maintained its prestige as a global safe haven in recent memory, we can expect substantial political changes in key world economies to inspire risk-averse investors to seek alternative forms of investment, offering a minor boost to US equity pricing.

Dow Jones 30 (US30USD), Nikkei 225 (JP225USD) and CAC 40 (FR40EUR), OANDA, TradingView, 07/10/2025

Dow Jones 30 (DJ30): Technical Analysis 07/10/2025

Let’s now direct our focus to market technicals, starting with the daily, and then concluding with the four-hourly.

Dow Jones 30 (DJ30): Daily (D1) chart analysis (07/10/2025):

Dow Jones 30 (US30USD) D1, OANDA, TradingView, 07/10/2025

With a crossover of the 9 and 21-period moving averages marking the start of the current uptrend, the Dow Jones trades are almost 4.00% higher since.

While the price trades above the current trend line, we are approaching the upper limits of the 20-period Bollinger band, which, so far, correctly suggested that the price needs to retrace towards the baseline before a move higher.

From a technical perspective, if support can be maintained at $46,650, further upside can be expected in the near term.

Price targets and support/resistance levels:

• Price target 1: 78.6% Fib: $47,100
• Support 1: Previous high: $46,450
• Support 2: Consolidation: $45,642

Dow Jones 30 (DJ30): Four-hourly (H4) chart analysis (07/10/2025):

Dow Jones 30 (US30USD) H4, OANDA, TradingView, 07/10/2025

For those with a passion for technical analysis, the H4 Dow Jones chart is a textbook example of a stairstep pattern, providing those with a keen eye plenty of opportunity to get long.

Price targets and support/resistance levels:

• Price target 1: All-time high: $47,102
• Support 1: Previous swing high: $46,508
• Support 2: Bottom of consolidation: $46,157

At current, price looks for support at the trendline, but may slide lower to the lower limit of the 20-period Bollinger band if support can not be found.

To the upside, a clear target would be the previous high of $47,102, although some may view $47,000 as a logical exit point.

USDJPY: ⬆️ Buy

• USDJPY broke key resistance level 151.00
• Likely to rise to resistance level 153.00

USDJPY currency pair recently broke above the key resistance level 151.00 (former strong resistance from July, which stopped the previous impulse wave 1).

The breakout of the resistance level 151.00 continues the active short-term impulse wave 3 from the middle of September.

Given the clear daily uptrend and the strongly bullish US dollar sentiment seen today, USDJPY currency pair can be expected to rise to the next resistance level 153.00.

Bitcoin: ⬇️ Sell

• Bitcoin reversed from the resistance zone
• Likely to fall to support level 117620.00

Bitcoin cryptocurrency recently reversed down from the resistance zone between the key resistance level 123240.00 (former strong resistance from July and August) and the upper daily Bollinger Band.

The downward reversal from this resistance zone stopped the earlier short-term impulse wave 3 from the end of September.

Given the strength of the resistance level 123240.00 and the overbought daily Stochastic, Bitcoin cryptocurrency can be expected to fall to the next support level 117620.00 (former top of wave 1 from September).

The World Trade Organization said today that global merchandise trade outpaced expectations in the first half of 2025, buoyed by strong demand for AI-related products, a surge in North American imports ahead of tariff increases, and resilient trade among emerging economies.

As a result, WTO economists raised 2025 global merchandise trade growth forecast to 2.4%, up from 0.9% projected in August. However, growth is expected to slow sharply to just 0.5% in 2026, reflecting the delayed impact of trade restrictions and slowing global demand. WTO added that services trade is also set to cool, with export growth projected to ease from 6.8% in 2024 to 4.6% in 2025 and 4.4% in 2026.

Director-General Ngozi Okonjo-Iweala credited the improved near-term outlook to countries’ “measured response to tariff changes” and the growth potential of AI, noting that global supply chains are adapting to geopolitical realignments rather than retreating from them.

Okonjo-Iweala highlighted that South-South trade—commerce among developing economies—rose 8% year-on-year in value terms during the first half of 2025, outpacing the 6% increase in overall world trade. Excluding China, South-South flows expanded even faster, up around 9%.

Full WTO release here.

Markets

Wherever you look, there’s serious political risk with public finances as the common root cause. A cost of living crisis in Japan and public discontent with the government’s response (ie. relief measures) triggered the demise of the LDP’s majority in both houses of parliament. LDP leader and PM Ishiba had to give way for a fiscal dove, Takaichi, who argued for tax cuts earlier despite the country’s explosive debt situation. The US Congress meanwhile is divided over the continuing resolution to bring an end to the shutdown, which entered its seventh day today. Support of Senate Democrats is needed but they are using their leverage to roll back some of the social security spending cuts Republicans had planned. And then there’s France, home to textbook political unwillingness and/or inability to address a rapidly deteriorating budget situation. Back in the days, when the ECB was still accumulating sovereign bonds en masse, markets weren’t particularly worried about government debt. One pandemic and a structurally changed interest rate environment later, they are way less forgiving for those still living in the past. Outgoing prime minister Lecornu has talks planned with parties today and tomorrow to see what is still possible. But chances for him to find a solution of any kind are extremely slim. It’s merely buying president Macron time to ponder his options. None of them are appealing. The most drastic one, early presidential elections (scheduled for 2027), seems to be the most unlikely one, although pressure is mounting. Edouard Philippe, a former PM and close ally of Macron, suggested during an interview with RTL radio that’s what the president should do. New parliamentary elections on the other hand hold a “terrible risk” of still resulting in a hung assembly and prolonging the crisis. The French swapspread continues to march higher towards the 2025 multiyear high, but in a move shared by European peers. German yields add up to 2 bps at the long end in quiet trading. Treasuries and gilts lack inspiration and trade basically flat on the day. The euro underperforms against an overall stronger USD but recoups some of yesterday’s losses against GBP. EUR/USD eases to 1.167, EUR/GBP advances to but remains below 0.87. Both European stocks and WS eke out slight gains. France’s CAC40 adds 0.2%.

News & Views

Hungarian industrial production in August declined 2.3% M/M (SA and WDA) and was 4.6% lower compared to the same month last year. In the first eight months of the year industrial production was 3.9% lower than in the same period of 2024. The statistical office indicates that production volumes decreased in the manufacturing subsections - except for one - compared to the same month of the previous year. Out of the subsections having the largest weight a significant decrease was observed in the manufacture of transport equipment, while the manufacture of computer, electronic and optical products grew. In the meantime, the disappointing growth performance causes the government to put some pressure on the National Bank of Hungary (MNB) to shift to a more growth supportive policy. Yesterday, Prime Minister Orban already indicated that he saw room for lowering the MNB policy rate. His call today was reinformed by comments from Economy Minister Nagy who assessed that rates are too high and that there is room to lower them even as the MNB aims to reduce inflation and still allowing a stable forint. Despite the ‘growing political pressure’, the MNB director of Monetary policy, Adam Banai, this afternoon repeated that a tight monetary policy is still warranted. Even so, the 2-y Hungarian swap rate today declines 8 bps (to 6.18%). The forint made a step backward currently trading near EUR/HUF 392 compared to a below EUR/HUF 389 this morning.

According to UK Mortgage lender Halifax, house prices in the country in September declined 0.3% M/M. This reduced the Y/Y-growth rate to 1.3%, the slowest pace since April 2024. Halifax said that “This slight monthly dip in house prices reflects a housing market that has remained broadly stable, prices are up +0.3% since the start of the year’. Halifax indicates that affordability remains a challenge, but a relative lower mortgage rate environment and steady wage growth are seen helping support buyer confidence.

Daily Pivots: (S1) 149.45; (P) 149.97; (R1) 150.88; More...

Breach of 150.90 suggests that USD/JPY's rally from 139.87 is resuming. Intraday bias is stays on the upside for 151.22 fibonacci level. Sustained break there will carry larger bullish implication. Next near term target will be 100% projection of 142.66 to 150.90 from 145.47 at 153.71. On the downside, below 149.74 minor support will turn intraday bias neutral again first.

In the bigger picture, price actions from 161.94 (2024 high) are seen as a corrective pattern to rise from 102.58 (2021 low). Decisive break of 61.8% retracement of 158.86 to 139.87 at 151.22 will argue that it has already completed with three waves at 139.87. Larger up trend might then be ready to resume through 161.94 high. In case the corrective pattern extends with another fall, strong support is expected from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound.

Daily Pivots: (S1) 0.7932; (P) 0.7963; (R1) 0.7979; More…

Intraday bias in USD/CHF stays neutral as range trading continues. On the upside, sustained trading above 55 D EMA (now at 0.8004) will suggest that rise from 0.7828 is already correcting whole fall from 0.9200. Further rise should the be seen to 0.8170 resistance and possibly above. However, break of 0.7908 will turn bias back to the downside for retesting 0.7828 low.

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8332 support turned resistance holds (2023 low).

Daily Pivots: (S1) 1.3437; (P) 1.3464; (R1) 1.3511; More...

Range trading continues in GBP/USD and intraday bias stays neutral. With 1.3535 resistance intact, further decline is mildly in favor. On the downside, break of 1.3322 will resume the fall from 1.3725 to 1.3140 support. On the upside, though, firm break of 1.3535 will argue that pullback from 1.3725 has already completed, and bring stronger rise to retest 1.3725/87 key resistance zone.

In the bigger picture, rise from 1.0351 (2022 low) is still seen as a corrective move. Further rally could be seen to 61.8% projection of 1.0351 to 1.3433 (2024 high) from 1.2099 (2025 low) at 1.4004. But strong resistance could be seen from 1.4248 (2021 high) to limit upside. Sustained break of 55 W EMA (now at 1.3176) will argue that a medium term top has already formed and bring deeper fall back to 1.2099.

Daily Pivots: (S1) 1.1668; (P) 1.1699; (R1) 1.1747; More...

EUR/USD is still holding in range above 1.1644 and intraday bias remains neutral. Further decline is mildly in favor as long as 1.1778 resistance holds. On the downside, break of 1.1644 and sustained trading below 55 D EMA (now at 1.1679) will indicate medium term topping at 1.1917, on bearish divergence condition in D MACD. Further fall should then be seen to 1.1390 support. Nevertheless, break of 1.1778 resistance will retain near term bullishness and bring retest of 1.1917 high instead.

In the bigger picture, rise from 1.0176 (2025 low) is seen as the third leg of the pattern from 0.9534 (2022 low). 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916 was already met. For now, further rally will remain in favor as long as 1.1390 support holds, and firm break of 1.2000 psychological level will carry larger bullish implications. However, firm break of 1.1390 will suggest that rise from 1.0176 has already completed and bring deeper fall to 55 W EMA (now at 1.1265).