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/MMBtu—the 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.

Start trading commodity CFDs with tight spreads (additional fees may apply). 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.