Natural Gas Up On Weaker Usd

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Natural Gas Up On Weaker Usd

Natural Gas Up By 2% On Weaker Usd

Natural Gas (XNG/USD) is already up by 2% during Thursday's session as the dollar takes the back seat after CPI & Retail Sales.

For now, the Natural Gas is sitting comfortably at 4-month highs and is all ready to target new heights. Meanwhile, it looks like China is now ready to tap into the gas markets, as China's national firm has already ordered $2.2 billion worth of LNG.

Chinese Demand Propels The Natural Gas Market

This also confirms the rumors that a lot of Chinese participants are buying Natural Gas contracts in the US & EU gas markets.

As the Natural Gas traders are higher, the DXY is on the back foot, which means the dollar weakness against 6 major currencies. The weakness in the DXY is driven by a weaker CPI & retail sales data, which has once again reignited the debate of rate cuts by the US Fed.

The markets are now looking forward to at least two rate cuts this year, but there's still no confirmation from the US Fed. In fact, Jerome Powell & other Fed officials are actually very vocal about the need for data confirmation. So, for now, the markets believe in rate cuts, but the same can't be said about the US Fed's motives.

Natural Gas is seen trading near the price level of $2.63 with a bullish bias on greenback weakness and Chinese demand.

Natural Gas's bullish advance has already been sent above the 200 SMA on the D1 chart. Looking ahead, Natural Gas is now eyeing $3.07 and $3.10 as the next possible targets for profit taking.

If these levels are achieved, it would mean an upside of almost 18% and will send Natural Gas toward new yearly highs. However, the $3.00 is a strong resistance and may prove a lot harder to crack than how it appears on the surface.

On the way down, the $2.09 is a strong support as that's where the 100 SMA is sitting right now. After that, the next levels can be seen at the $2.00, $1.90, and then the $1.75.

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