Natural Gas Technical Analysis: Markets surprised by tougher sanctions
Natural Gas finally broke out of the range in which had been stuck since the end of January, between $1.60 and $2.11. A near $0.50 range that is now broken after the US is set to extend sanctions on Iran’s Oil sector. In the ripple effect of higher oil prices and elevated tensions in the Middle East, a stronger US Dollar could become a side effect of this bill being signed by US President Joe Biden next week.
On the upside, the blue line at $2.11, the 2023 low, and the 100-day Simple Moving Average (SMA) at $2.12 have been broken, resulting in a fresh two-month high. Further up, the next resistance level is the January 25 high at near $2.33.
With the firm break of the $2.11 area, the above mentioned elements (the 100-day SMA and the pivotal blue line) should now be acting as support. Traders could expect a retrace under some profit-taking, which this level should be able to withstand. Should it still break below, XNG/USD could experience a movement towards $1.92, testing a bounce off the red descending trend line
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