Categories: Forex News
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2023-08-24 8:49 AM

Natural Gas Rebounds: South Africa Watches Key Market Shifts

  • Natural Gas Price (XNG/USD) shows a rebound to approximately $2.62, marking its first daily gains in three days, as the market consolidates in anticipation of significant upcoming data/events.
  • Despite a weaker US Dollar and dismal global PMIs for August, the energy instrument's decline halted due to concerns over US-China relations and US weather conditions that had previously supported XNG/USD. Key US data and the Natural Gas Storage Change report by the US Energy Information Administration are keenly awaited.
  • On the technical front, the Natural Gas Price faces challenges in maintaining its upward momentum after breaking an ascending trend line from June. Immediate resistances and supports are identified around the $2.65 and $2.54 markers, respectively.
By Nonhlanhla

The Natural Gas Price, when converted to XNG/ZAR, showcases promising gains for the first time in a trio of days, lifting from a three-week low, as the global market steadies in preparation for forthcoming critical data releases this Thursday. As of this report, the energy commodity is showcasing modest gains, hovering around ZAR 48.54 (USD 2.62).

This rise in natural gas prices comes despite a softer US Dollar. Recent global PMI data for August painted a somewhat pessimistic economic landscape, hinting at potentially diminished energy consumption. Factors such as evolving US-China diplomatic dynamics and recent favourable US weather conditions, which previously buoyed the XNG/ZAR rate, could be influential. Notably, market watchers are keenly anticipating the US Durable Goods Orders, Chicago Fed National Activity Index, Kansas Fed Manufacturing Activity, and the weekly Jobless Claims. Additionally, the weekly Natural Gas Storage Change report from the US Energy Information Administration (EIA), with expectations at -8.0B compared to the previous 35B, holds the attention of commodity investors.

The anticipation surrounding the annual Jackson Hole Symposium, which spans two days, lends a cautious optimism to the market, helping the XNG/ZAR pair recoup some of the week’s losses.

In the larger financial landscape, the S&P500 Futures have surged by half a percent, reaching 4,470 at the time of writing. This comes after a notable rise, the most significant monthly jump witnessed the day prior. Concurrently, the US 10-year Treasury bond yields are fluctuating near 4.20%, arresting a two-day decline that started from its peak since 2007. Additionally, the US Dollar Index (DXY) remains stable at around 103.40, having retreated from an 11-week pinnacle, providing a testing ground for the XNG/ZAR bullish sentiment.

Technical Overview for Natural Gas Price in ZAR:

Currently, the Natural Gas Price grapples to uphold its rebound from a multi-day trough, especially after transgressing an upward trajectory from the onset of June. This places an immediate resistance near ZAR 49.05 (USD 2.65). The bearish undertones of the MACD intensify the potential for a bearish trend for the XNG/ZAR.

Yet, the convergence of a trend line that’s been ascending for five weeks and the 100-DMA, approximating ZAR 47.01 (USD 2.54), seems to present a formidable challenge for those bearish on Natural Gas.

Conversely, a declining resistance trajectory from 10th August and the 50-DMA, closely pegged at ZAR 49.44 (USD 2.67) and ZAR 49.94 (USD 2.70) respectively, serve as hurdles for the bullish trajectory of XNG/ZAR. Beyond these, the resistance-turned-support near ZAR 49.05 (USD 2.65) becomes pivotal.

If the Natural Gas Price in ZAR fortifies its position beyond ZAR 49.05 (USD 2.65), the previous month’s zenith, hovering around ZAR 51.48 (USD 2.78), will undoubtedly draw market attention.

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Nonhlanhla

Nonhlanhla P Dube is a senior news reporter. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her on: Email: nonhlanhla@rateweb.co.za

Tags: natural gas