Natural Gas Prices, represented by XNG/USD, have been delicately oscillating around ZAR 54.346 ($2.90), with keen market participants globally, including in South Africa, keeping their eyes peeled for the highly anticipated US Nonfarm Payrolls (NFP) data set to be released on Friday. This focus comes as the XNG/USD exhibits resilience against the backdrop of a recent pullback from a three-week peak, setting the stage for what could be its second consecutive weekly ascent.
Current market indicators present a mixed outlook. The tepid movements of the Moving Average Convergence Divergence (MACD) combined with a positive Relative Strength Index (RSI) provide a somewhat optimistic picture for Natural Gas investors. The key level to watch is the one-week-old ascending support line, hovering around ZAR 53.6424 ($2.86). Notably, if prices remain stable above this threshold, July’s high of ZAR 52.0752 ($2.78) and the established upward trend line near ZAR 49.691 ($2.65) stand as potential obstacles for any downward pressure on XNG/USD.
However, if the Natural Gas Price dips below the ZAR 53.6424 ($2.86) mark, it could be indicative of a rising wedge bearish pattern. This might set a potential trajectory towards the ZAR 33.5426 ($1.79) mark. On this potential descent, the XNG/USD might face resistance at April’s low of approximately ZAR 39.5404 ($2.11) and the significant ZAR 37.48 ($2.00) psychological benchmark.
On the flip side, recovery seems to be capped at the recent high of ZAR 56.22 ($3.00). Any bullish momentum beyond this point would need to navigate through the confluence of the 200-Day Moving Average (DMA) and a downward resistance line dating back to early March, which converges around the ZAR 57.177 ($3.05) level.
Should the momentum surpass these levels, the top line of the mentioned wedge, located near ZAR 58.4168 ($3.12), is expected to be the final frontier for the XNG/USD bears.
For South African investors and businesses relying on Natural Gas, these global price dynamics and the upcoming US data become critical, as they could have ripple effects on energy prices and policies in the region.