XNG/USD Analysis: Bears Pressure Key Support
On 5 December, while analysing the natural gas chart, we noted that price movements:
were forming an ascending channel (shown in blue);
support from the lower boundary of the channel (reinforced by the psychological level of 3.000) was already evident in a nascent price reversal (indicated by an arrow).
As the XNG/USD chart illustrates, since that time (marked by a blue arrow), the price indeed rose, using the support from the lower boundary of the channel to reach its upper boundary on 30 December.
However, we now see supply forces displaying aggression whenever the natural gas price climbs above 3.700, bears quickly intervene (marked by red arrows), pushing the price back down.
What could happen next?
From a technical analysis perspective of the XNG/USD chart:
The price is hovering near the key support, formed by the lower boundary of the ascending channel (which has been in place since last summer).
Bearish aggression, as mentioned above, sets the stage for a potential bearish breakout of this critical support, evidenced by the bearish gap at Mondays market open.
From a fundamental analysis standpoint:
Meteorological reports of colder weather drove the price up to 3.570, but this appears to be a temporary rebound.
Bearish sentiment in the natural gas market may be amplified by statements from the Trump administration expressing a determination to lower oil prices.
Read more: https://fxopen.com/blog/en/oa-xng-usd-analysis-bears-pressure-key-support/
Text source: Forex Trading Blog
