The Price of Natural Gas Finds Support. But for How Long?

FXOpen

On 21 June, we wrote that the trend in the market was weakening, noting that:

→ Forecasts of a hotter summer, published during April-May, led to a sustained bullish trend in the natural gas market.

→ According to the technical analysis of the 4-hour XNG/USD chart and the signs of weakness that have formed on it, the level of 3.160 appears to sufficiently account for the risks of an extremely hot summer.

→ Bears might push the price to the lower boundary of the ascending trend channel.

Since then, the price of natural gas has:

→ tested the median of the ascending channel (shown by an arrow), which acted as resistance;

→ broken the lower boundary of the channel;

→ dropped to the level of 2.06 amid news of sufficient natural gas reserves in storage.

And, as the XNG/USD chart shows today, it is this level that is now forming signs of support for the market:

→ the lows A-B appear to be elements of an incomplete double bottom pattern;

→ the level of 2.06 acted as resistance in March-April, so support here is anticipated by technical analysts.

But can the bulls reverse the trend?

In the near future, the price of natural gas may consolidate within a narrowing triangle, formed by the support at 2.06 and the descending trend line (shown in red). It is possible that failures in any attempts to break through the red line will lead to a resumption of the downward trend and a subsequent decline in price towards the support at 1.875.

Start trading commodity CFDs with tight spreads. Open your trading account now or learn more about trading commodity CFDs with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Stay ahead of the market!

Subscribe now to our mailing list and receive the latest market news and insights delivered directly to your inbox.

forex

Commodity CFD Trading with FXOpen

Commodity CFD Trading with FXOpen

  • Trade with tight spreads and low commissions
  • Choose from 4 trading platforms: MT4, MT5, TradingView, or TickTrader
  • Experience ECN technology for deep liquidity and light-speed trade execution
Learn more

Latest articles

Commodities

Market Analysis: Gold Price and Crude Oil Price Face Hurdles

Gold price started a fresh decline below $2,665. Crude oil prices are now struggling to clear the $70.00 and $70.50 resistance levels.

Important Takeaways for Gold and Oil Prices Analysis Today

  • Gold price climbed higher toward the
Trader’s Tools

Santa Claus Rally: How Will Christmas Impact Stock Markets in 2024

The Santa Claus rally is a well-known seasonal phenomenon where stock markets often see gains during the final trading days of December and the start of January. But what causes this year-end trend, and how does Christmas influence stock markets

Forex Analysis

GBP/USD Analysis: Pair Recovers from 7-Month Low

The GBP/USD pair dropped below the psychological level of 1.25 today, a level last seen in early May. Over the past two days, the pair has declined by more than 1.5%, driven by central bank decisions.

On

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.