Natural Gas up over 1% in European trading.
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- Natural Gas up over 1% in European trading.
- Traders are sending Gas higher in an inverse correlation with a weaker US Dollar.
- The US Dollar Index is flat to mildly in the red with markets catching up after Monday’s US holiday.
Natural Gas (XNG/USD) is jumping back above $1.65 and is trying another attempt to snap its losing streak. The countermove gets a bit of help from the US Dollar which is retreating a touch just hours before the US opening bell. Selling pressure meanwhile comes from European headlines where Natural Gas is facing even more headwinds.
The US Dollar (USD) is retreating a touch on Tuesday with US markets getting ready to catch up after their public holiday on Monday. Traders are sending European bond yields higher after the European Central Bank Report (ECB) shows European wages are still very elevated. The Euro is up against the US Dollar, which makes the US Dollar Index (DXY) retreat a touch.
Natural Gas is trading at $1.66 per MMBtu at the time of writing.
Natural Gas faces more and more headaches, on a near daily basis when looking at the headlines that are emerging from one of its biggest consumers: Europe. The green sprint in Europe, together with more and more green energy sources overtaking Natural Gas as a source of energy, threatens the future for Gas in terms of volumes needed. For now India is happy to take over those excess volumes, though the question remains for how long?
On the upside, Natural Gas is facing some pivotal technical levels to get back to. First stop is $1.99, – the level which, when broken, saw an accelerated decline. Next is the blue line at $2.13 with the triple bottoms from 2023. In case Natural Gas sees sudden demand pick up, possibly $2.40 could come into play.
Keep an eye on $1.80, which was a pivotal level back in July 2020 and should act as a cap now. Should more supply emerge in the markets, or more weakening data globally point to even more sluggish global growth – $1.64 and $1.53 (the low of 2020) are targets to look out for.
XNG/USD (Daily Chart)
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