Natural Gas Price Analysis: XNG/USD bulls have the upper hand above 200-day SMA

  • Tuesday, 19 September 2023 | 3:33 GMT
  • Natural Gas price is seen consolidating the previous day’s strong move up.
  • The technical setup favours bulls and supports prospects for further gains.
  • A break below the $2.640-$2.6375 confluence will negate the positive bias.

The Natural Gas price is facing challenges in capitalizing on the strong intraday rally it experienced from the $2.8520 region on the previous day. During the Asian session on Tuesday, it has been trading within a narrow range. Despite this, the XNG/USD remains below the one-month high it reached around the $3.0350 level last Friday. However, the technical analysis indicates that the path of least resistance appears to be on the upward side.

One notable factor contributing to this bullish sentiment is the repeated bounce from the 100-day Simple Moving Average (SMA), coupled with a sustained strength that extends beyond the crucial 200-day SMA. Additionally, the technical indicators on the daily chart are comfortably situated in positive territory and are far from entering the overbought zone. This reaffirms the short-term optimistic outlook for the XNG/USD and lends support to the potential for further appreciation in its value.

The potential for further upward momentum in the XNG/USD hinges on whether it can breach the psychologically significant $3.000 mark, which would confirm the positive setup. If this level is surpassed, it could propel the XNG/USD towards the next significant obstacle around the $3.1875 range. This particular zone represents the upper boundary of a longstanding ascending trend channel that has been in place for several months. A clear breakthrough here would signify a fresh breakout and open the door to additional gains.

Conversely, there is a protective buffer around the $2.8520 region, which corresponds to the 200-day Simple Moving Average (SMA). A substantial breach below this level could expose the monthly low, approximately at the $2.7150 mark, before potentially leading the XNG/USD to a convergence zone between $2.6400 and $2.6375. This range includes both the 100-day SMA and the support line of the ascending trend channel. A decisive break through this confluence could shift the short-term sentiment in favor of bearish traders and trigger a wave of aggressive selling.

XNG/USD Daily chart

Natural Gas Price Analysis: XNG/USD bulls have the upper hand above 200-day SMA

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