Natural Gas Above Support

Natural Gas Above Support by Andrew Blumer last updated on February 26, 2024

Natural Gas Above $2 Threshold On Slow Eu Recovery

Natural Gas (XNG/USD) has finally jumped higher from its 4-year lows and has managed to touch the $2.04 level. The increase in natural gas is attributed to the heightened geopolitical tensions in the Middle East.

There's a negative correlation between the Natural Gas and the US Dollar. So that's also a factor that has helped natural gas turn higher as the greenback is being sold after the release of US jobless data.

According to the data, the number of layoffs almost doubled in January when compared with the previous month. Looking forward, a weak NFP report could also invite more weakness in the US Dollar.

Natural Gas Trades Near $2.06

For now, the Natural Gas is sitting comfortably above the $2 support and can be seen near the $2.06 / MMBtu which is a multi-year high.

According to experts, the current trading price of natural gas is very important as the commodity has reached a 'make it or break it' point. In simple words, the natural gas can either drop under the $2.00 or cross the $2.10 resistance zone.

The natural gas will need to reclaim the $2.10 handle if it truly wants to turn the long-term trend into a bullish one. Next up will be $2.48, which is also very close to the static level of $2.50. Once the area between $2.48 - $2.50 is cleared, the natural gas will then move towards the $2.57 level.

On the downside, the $2.04 seems to be important support, followed by the $2.00, which will be a tough nut to crack. But if the natural gas fails to hold at these levels, the next stop will be $1.96, which also happens to be low from August 2020.

Any further weakness in the natural gas will open the doors to the area of $1.51 - $1.50, which is also a very strong support zone.

On the fundamental front, the factor that is fueling the upside in natural gas is a slowdown in the recovery of the EU industrial output.