. Natural Gas Prices: Latest Trends & Analysis - Capital Street FX

Natural Gas Prices: Latest Trends & Analysis

14 May 2024

Natural Gas remains steady despite profit-taking at elevated levels.

FUNDAMENTAL OVERVIEW:

  • Natural Gas prices faced resistance at $2.53 but managed to contain losses.
  • Geopolitical risks have slightly eased as the Qatar Economic Forum begins.
  • Meanwhile, the US Dollar Index remains stable, consolidating above 105.00.

Natural Gas price (XNG/USD) has surged 40% since the end of March, partly due to Israel’s ongoing attacks on Gaza. However, increasing pressure from world leaders urging a ceasefire may ease tensions. Additionally, Europe has secured sufficient gas supplies for the upcoming heating season and plans to achieve independence from Russian gas by 2028 through substantial long-term measures starting from 2025.

The US Dollar Index (DXY), monitoring the Greenback’s performance against six major currencies, remains steady above the crucial support level of 105.00 on Tuesday, ahead of US Federal Reserve (Fed) Chairman Jerome Powell’s speech. Investors are preparing for the release of the Consumer Price Index (CPI) for April on Wednesday. Powell’s remarks on the potential prolongation of higher interest rates could shift expectations for the timing of the initial Fed rate cut to later in 2024 or even early 2025. Such a scenario may strengthen the US Dollar, consequently exerting downward pressure on gas prices in USD.

The upcoming release of the OPEC Monthly Market Report on Tuesday may impact not only oil but also the broader energy sector, potentially bringing both challenges and opportunities depending on its outlook or any policy adjustments.

NATURAL GAS TECHNICAL ANALYSIS DAILY CHART:

Technical Overview:

Natural Gas is trading within a up channel.

Natural Gas is moving above all the Moving Averages (SMA).

The Relative Strength Index (RSI) is in the Buying zone, while the Stochastic oscillator suggests a Neutral trend.

Immediate Resistance level: 2.36

Immediate support level: 2.18

HOW TO TRADE NATURAL GAS

After initially declining, Natural Gas found support and formed a double bottom pattern before reversing its price direction to the upside. Currently, it has surpassed its resistance level and is trading above it. If it continues to maintain this position above the resistance level, Natural Gas could see further upward movement.

TRADE SUGGESTION- BUY LIMIT– 2.26, TAKE PROFIT AT- 2.50, SL AT- 2.13.