Natural Gas (XNG/USD) Jumps To $2.62 As Global PMIs Decline
Natural Gas (XNG/USD) pair jumped higher and touched $2.62 after refreshing 3-week lows. For now, the XNG/USD is showing signs of consolidation as the market awaits top-tier events for the rest of the day.
Overall, Natural Gas (XNG/USD) is still positive to the day, near $2.62, which tells us that the energy commodity has the upper hand against the US Dollar.
At the same time, the strained US-Chine ties as well as the weather conditions in the USA, are also favoring a positive Natural Gas.
Cautious Market Mood Affects Natural Gas
But the overall market mood is 'cautious,' which is the main reason why the price action in XNG/USD is so restrictive. Ahead of the key events, most investors don't want to take any positions for fear of suffering heavy losses.
If we look at the US side, the S&P 500 futures are trading near 4470 points with a 0.5% gain. Similarly, the 10-year bond yields continue to hover near the 4.20% level and show signs of a slowdown in the recent bearish trend. As for the DXY, it is also lacking any direction near the 103.40 after hitting a multi-month high.
The technical outlook of Natural Gas suggests that the bearish pressure is increasing slightly as we approach the $2.65 resistance zone. In addition, the MACD is also signaling a bearish trend with its readings, which tells us that the path to least resistance is downwards for Natural Gas.
However, the 100 SMA, along with a bullish trend line, is also pushing the Natural Gas higher. So, in a sense, we can say that both parties (bulls & bears) are trying to push Natural Gas in their desired direction.
So if the Natural Gas crosses the $2.65 zone and remains firm afterward, it would send it flying toward the $2.78 resistance zone. But we believe that any further moves in the Natural Gas will have to wait unless we get fresh impetus from the Jackson Hole Symposium.