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Nat Gas Technicals – Bottom of Rising Channel with 3.75 threatened

Weekly Chart


While commodities enjoyed a mini rally yesterday [1], Natural Gas is having none of it. Prices of Nat Gas tanked yesterday following yet another week of supply surplus, with the US Energy Information Administration latest data showing a gain of 111 billion cubic feet in the weekly Storage Change report, versus an expected 100 and 88 the previous week.This increase in supply pushed price back below 3.90, slightly below the bottom of current Rising Channel but still slightly above the 3.75 significant support/resistance.

Unfortunately for the bulls, current momentum suggest that price may be able to break 3.75 with Stochastic readings looking to accelerate lower from here. There is ample space between current reading levels and the 20.0 Oversold region that will provide price to potentially reach the 2010 low of around 3.25 based on current momentum. A break of 3.75 will also imply that the bullish momentum that has been built up since April 2012 is impaired, which will subject price to further bearish pressure

Fundamentally, it is worth noting that the USD weakening yesterday did not have any positive impact on Nat Gas, with prices declining 2 hours even before the supply data was released. This suggest that pace of decline can be even higher if USD start to strengthen again, and pull commodities down across the board. With US expected to pump out more Nat Gas, the glut in supply will not be resolved anytime soon. Demand of gas within US is kind of a hit/miss with calls for cleaner energy fuel sources getting softer with economic woes taking most of the limelight. With summer coming up, weather will naturally dictate that energy usage will be lower, which will impact current prices further.

More Links:
Gold Technicals – Quest to 1,420 Act II [1]
USD/JPY Technicals – Breaking Multiple Support but 96.0 Firm [2]
GBP/USD – Surges to Four Month High Near 1.57 [3]

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Mingze Wu

Mingze Wu [8]

Currency Analyst at Market Pulse [9]
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu
Mingze Wu

+Mingze Wu [12]