Technical Analyst, Saxo Bank Group
Dutch Gas opened yesterday Tuesday below 0.618 retracement and key support at €187.50. But buyers took immediate control and kept it through-out the session and closed the market well above the key support forming a Bullish Engulfing candle which indicates a bottom and reversal. RSI is still above 40 and has not been below since June i.e., positive sentiment and indicating reversal.
Dutch gas is set for a strong rebound. A move to 0.382 retracement of the sell-off at 235.50 and resistance at 247 with-in few days is likely.
If breaking above that resistance area next key resistance area is the 0.618 retracement at around 276 and 290.
If closing above 290 a new all-time high is likely.
As mentioned RSI is still positive and there is no divergence supporting the higher highs scenario and to reverse that Dutch Gas must close below 169.75.
Henry Hub Gas closed above key support at $7.55. If the price moves back above the 55 SMA more upside should be expected and the Shoulder-Head-Shoulder like formation is likely to be demolished.
The S-H-S scenario is explained in previous Gas update 19th September: https://www.home.saxo/content/articles/commodities/ta-energy-19092022
If closing below 7.55 the S-H-S pattern is in play with a minimum potential down to around 6.45.
RSI is not really providing guidance at the moment but if it closes above its falling trend line the uptrend scenario is likely to unfold.
Technical Update - Natural Gas finds support. Dutch Gas seems to reverse down trend. Henry Hub treading water
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Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
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