background image background image background image

Technical Update - Natural gas and Crude oil testing key supports. Can they hold and rebound or break lower?

Commodities 4 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Dutch Gas opened today Monday 19th September below its key support €187.50 and is hovering around the 0.618 Fibonacci retracement at 178.42. Dutch gas Is short-term in a down trend and could drop further to next key support at 152. If that scenario plays out RSI has moved below 40 threshold and turned negative.
But if RSI does not close below 40 a rebound could be seen. There is no divergence on RSI above 60 so if RSI does not cancel that picture by a close below 40 the bullish sentiment is still intact. Bottom line; Today’s trading – or rather the closing of today’s trading - is likely to be key.

Dutch gas 19sep
Source: Saxo Group

Henry Hub gas is testing the key support at 7.55 in what could be the Neckline of a Shoulder-Head-Shoulder like pattern. It is not the most perfect pattern as one could argue it is just huge volatility in a broader time series. To be a perfect SHS pattern there should be no uptrend and peak April through June.
Nevertheless, if Henry Hub gas closes below the (Neckline) support there is room down to June/July lows at around 5.35.
However, there is strong support at the 0.764 Fibonacci retracement at 6.44 where the 200 daily SMA also will add to that support area.
For Henry Hub to demolish this picture a close above 9.24 i.e., the right shoulder is needed.

Henry Hub  19sep
Source: Saxo Group

Brent Crude oil trading in a falling wedge like pattern is likely to have another go at the support at 87.70. If it closes below 87.70 and if RSI breaks below its lower slightly rising trendline with a likely lower value to follow, and Brent is likely to drop further to support at 83.00.
To reverse the selling pressure in Brent it needs to break above 95.80 for a correction around $100.
But to reverse the down trend a close above 105.50 is needed

Brent 19sep
Source: Saxo Group

WTI Crude oil trading in a falling channel is likely to test key support at 81.90 once again. A close below next support is at 78.48 and stronger support at 74.27.
RSIU is back below 40 with no divergence supporting a scenario with lower levels in WTI.
If WTI find buyers that can lift the oil price above 90.20 a correction up to around the upper falling trendline and possibly to around 97-98 could be seen.



WTI 19sep
Source: Saxo Group

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

Contact Saxo

Select region

International
International

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.