Natural Gas Price Drops Over 8% Since the Start of the Month
On 26 September, when analysing the XNG/USD natural gas price chart, we noted that:
Bulls might be "gathering strength" for a potential attempt to break the psychological level of 3.00.
If successful, this would pave the way towards the yearly high around 3.20.
Since then, the price of natural gas:
Broke above the 3.00 level on 27 September;
Reached 3.20 on 4 October, after which it reversed downward.
Bearish sentiment was driven by:
News that Hurricane Helen had minimal impact on natural gas processing facilities along the U.S. Gulf Coast;
Adequate gas reserves ensuring sufficient supply;
Weather forecasts indicating short-term gas demand at the end of September.
Technical analysis of the XNG/USD chart shows the upward channel (marked in blue) has lost relevance. Its evident that:
The bounce from the median line (shown by the first arrow) was weak;
The attempt to re-enter the channel from its lower boundary (as shown by the second arrow) led to a test of the 3.00 psychological level, which acted as resistance.
There are no signs yet of bulls trying to regain control on the XNG/USD chart. If the supply and demand balance remains unchanged, the natural gas price may continue its decline within the red downward channel, possibly towards its lower boundary, reinforced by the former resistance at 2.65.
Read more: https://fxopen.com/blog/en/oa-natural-gas-price-drops-over-8-since-the-start-of-the-month/
Text source: Forex Trading Blog
