Natural Gas Golden Cross Complements the Favorable Fundamentals

  • NGAS

NGAS Analysis

After a poor start to the year, natural gas prices soared in the second quarter, largely due to improved supply demand dynamics. Major drillers have lowered their activity this year, with Chesapeake standing out, with the more than 20% y/y output reduction forecast [1]. The International Energy Agency still expects production growth of around 1.5% this year, but expects consumption to outpace it, with a 2.3% increase [2]. The main culprits of the acceleration are fast-growing Asian economies like China and India.

The favorable fundamentals are now complemented by the Golden Cross Technical formation on the daily chart of NGAS (EMA50>EMA200), which is often a precursor of protracted strength. Drilling down to the H4 chart, the commodity stays in control as it defends the EMA200 (black line), following its recent pullback. Above it, bulls have the ability to push for higher highs towards 3.3974.

On the other hand, there are risk to the optimistic outlook, as China's post-pandemic recovery remains bumpy, EU counties extended their voluntary 15% gas demand reduction for one year [3], while drillers could increase their output as prices rise. As a result, we can deeper correction, but the daily Ichimoku Cloud can provide a strong buffer.

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.



Retrieved 27 Jun 2024


Retrieved 27 Jun 2024


Retrieved 15 Jul 2024

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