Natural Gas Price: Bullish Trend Weakens
Forecasts of a hotter summer, published during April and May, led to a sustained bullish trend in the natural gas market, as this commodity is heavily used for air conditioning.
Specifically:
The XNG/USD chart indicates that from 1st April to today, the price of natural gas has increased by more than 55%.
According to Bloomberg, there is a 61% chance that 2024 will be the hottest year on record, surpassing 2023.
Natural gas supplies may be unstable due to an unforeseen maintenance shutdown at the Freeport plant.
According to the technical analysis of the 4-hour XNG/USD chart:
The price of natural gas has formed an ascending channel (shown in blue).
On 23rd May, the price reached a 2024 high around the 3.160 level, breaking the upper boundary and entering the overbought zone on the RSI indicator.
On 11th June, this high was marginally exceeded, but the price then turned down, forming a false bullish breakout pattern.
Thus, the 3.160 level appears to adequately factor in the risks of an extremely hot summer. Therefore, the bullish trend weakens as it approaches this level.
Meanwhile, bears are becoming more active, indicated by:
The price of natural gas twice breaking below the green lines of intermediate upward trends.
The price broke below the median line of the blue channel (shown by the arrow).
This week, the psychological level of 3.000 acted as resistance.
It is possible that the bears could drive the price down to the lower boundary of the blue channel.
Read more: https://fxopen.com/blog/en/oa-natural-gas-price-bullish-trend-weakens/
Text source: Forex Trading Blog
