XNG/USD Analysis: Natural Gas Price Hits Over Two-Year High
On 27 January, while analysing the natural gas chart, we noted that price fluctuations:
Were forming an ascending channel.
Identified $3.700 as a key resistance level.
As shown on the XNG/USD chart, bears had control in late January but failed to maintain their grip. Since then:
Natural gas prices have continued their upward trajectory.
The $3.700 level was breached, becoming part of a resistance zone with an upper boundary at $3.800, which later acted as support (as indicated by the arrow).
As a result, today, natural gas prices have surged to $4.800/MMBtuthe highest level since late December 2022.
Bullish Factors Driving the Market (According to Trading Economics):
Weather Conditions A cold spell in the U.S. has increased demand for heating gas. Meteorologists predict a shift towards milder temperatures across 48 states in March.
LNG Exports U.S. liquefied natural gas (LNG) exports have hit a record high of 15.6 billion cubic feet per day under the new administration. Meanwhile, trade uncertainties, including a potential slowdown in natural gas flows from Canada to the U.S., are raising concerns among market participants.
Technical Outlook for XNG/USD:
The market remains in an uptrend (indicated by blue lines), with the price now exceeding its upper boundary.
The RSI indicator is approaching overbought levels and may form a bearish divergence.
These observations suggest that the price is in a vulnerable position for a pullback. If this scenario unfolds, a test of the $4.250 area cannot be ruled out.
Read more: https://fxopen.com/blog/en/oa-xng-usd-analysis-natural-gas-price-hits-over-two-year-high/
Text source: Forex Trading Blog
