Natural Gas eases a touch after its 12% intraday rally on Wednesday.

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• Natural Gas eases a touch after its 12% intraday rally on Wednesday.
• Traders see upside potential for Gas prices as supply issues mount.
• The US Dollar Index falls below 104.00 as market mood improves.

Natural Gas (XNG/USD) is locking in its position above $1.80 on Thursday after booking over 12% gains on Wednesday. Price increases are driven by increasing geopolitical tensions in the Middle East and increasing supply woes. Iran’s Oil minister Javad Owji accused Israel of sabotaging its main Gas pipeline and blamed the country for a series of attacks that are targeting Iran’s nuclear program. On the supply side, Chesapeake Energy reported it will cut its Natural Gas production by 20%, whileNorwegian and US LNG exports are seen stalling or substantially falling..

The US Dollar (USD) is facing a steep decline despite geopolitical tensions arising further, with The US Dollar Index (DXY) sliding below 104.00 following a wave of risk-on after upbeat Nvidia earnings and the Fed Minutes not bearing any surprise.

Natural Gas is trading at $1.86 per MMBtu at the time of writing.

Natural Gas had a field day on Wednesday with its 12% steep increase. Now it comes down to traders to maintain current price levels if more upside is to be had in the energy commodity. Some outside help from narrowing supply could push Natural Gas prices back to $2.

On the upside, Natural Gas is facing some pivotal technical levels to get back to. The next stop is $1.99, – the level which, when broken, saw an accelerated decline. After that, the green line at $2.13 comes into view, with the triple bottoms from 2023. If Natural Gas sees sudden demand pick up, $2.40 could come into play.

On the downside, $1.80 is a key support as it was a pivotal level back in July 2020. Should the recent headlines start to fade, or more supply emerge in the markets from other firms or countries to fill the gap, $1.64 and $1.53 (the low of 2020) are targets to look out for.

XNG/USD (Daily Chart)

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