- While Natural Gas prices remain static on Wednesday, futures on European markets experience a notable surge.
- Market sentiment reflects ongoing apprehension regarding potential Israeli retaliation against Iran, contributing to lingering tensions.
- Meanwhile, the US Dollar Index stabilizes following Federal Reserve Chairman Powell’s confirmation of a postponement in interest-rate cuts.
On Wednesday, Natural Gas (XNG/USD) maintains a flat trajectory, reflecting the market’s response to recent headlines concerning persistent tensions in the Middle East. White House National Security Advisor Jake Sullivan’s statement to Bloomberg indicates forthcoming sanctions against Iran, with a specific focus on the country’s drone program. Additionally, a joint statement from Saudi Arabia’s Crown Prince Mohammed Bin Salman and UAE President Mohammed Bin Zayed Al Nahyan underscores calls for restraint and highlights the risks associated with escalating conflict in the region.
In contrast, the US Dollar Index (DXY) shows signs of weakening following a notable five-day winning streak. With a light economic calendar ahead and reduced pressure on the US Federal Reserve to alter its stance, further easing is anticipated. Federal Reserve Chairman Jerome Powell’s recent remarks affirm that current inflation levels do not warrant a rate cut, signaling a prolonged period of steady interest rates.
As of writing, Natural Gas is priced at $1.90 per MMBtu.
Natural Gas news and market movers: Things can move at any moment
- The Barrow North LNG terminal in the United Kingdom is currently undergoing unplanned maintenance, while gas flows from Norway to Europe are recovering following unexpected outages at several major fields.
- Local European Gas Futures have surged by 20% in just five days, driven by supply concerns. However, prices are expected to moderate as Norwegian flows return to normal levels. The recent rally has paused, with the Relative Strength Index (RSI) indicating an overbought market.
- European gas storages are currently filled to 62% capacity and are anticipated to be replenished throughout the summer months.
- On Wednesday, headline risks persist as markets await details on Israel’s potential retaliatory actions against Iran.
- According to Bloomberg, US Rockies Natural Gas Production has declined by approximately 2.6%.
Natural Gas Technical Analysis: Domino’s could fall quickly
Natural Gas prices experience a period of relative stability on Wednesday, as market participants await clear updates from Israel regarding potential actions against Iran. This lull may provide a brief opportunity for prices to retrace slightly, although significant movement is not expected. With uncertainty prevailing, key support levels are likely to hold firm.
On the upside, attention is drawn to the resistance represented by a descending trend line in the $1.99-$2.00 range. A breakthrough above this level could trigger a swift ascent towards $2.11. Further ahead, the 100-day Simple Moving Average (SMA) at $2.15 emerges as a significant resistance barrier.
Conversely, the 55-day SMA around $1.88 serves as a crucial support level, offering a safety net for potential downturns. Subsequently, the upward-trending green trend line near $1.83, which has supported the rally since mid-February, becomes another important level to watch. However, if this level is breached, a decline towards $1.60 and $1.53 could become conceivable.
