Natural Gas Price Analysis: XNG/USD drops back towards 200-SMA within falling wedge
- Natural Gas struggles to defend the first daily gains in three inside bullish chart formation.
- Key SMA, impending bull cross on MACD lure XNG/USD buyers.
- Confirmation of falling wedge becomes necessary to convince Natural Gas bulls.
- Sellers have a bumpy road to travel unless breaking $2.14.
Natural Gas (XNG/USD) Price remains mildly bid around $2.44, recently retreating from the intraday top, during early Monday morning in Europe. In doing so, the XNG/USD struggles to keep the first daily gains in three after snapping the downtrend earlier in the day.
That said, the commodity’s latest weakness could be linked to the inability to keep the bounce off the 200-bar SMA. However, the looming bull cross on the MACD signal and a one-week-old falling wedge bullish chart formation keep the Natural Gas buyers hopeful.
The energy instrument’s latest fall eyes to break the 200-SMA support of $2.41 but the 61.8% Fibonacci retracement level of its early May upside, near $2.39, precedes the stated wedge’s lower line, close to $2.38 at the latest, to restrict short-term downside of the commodity.
Should the XNG/USD defies the bullish chart formation, multiple supports around $2.30-25 and the monthly low of around $2.14 can prod the bears before directing them to the yearly bottom of around $2.11 and then to the $2.00 round figure.
On the flip side, a convergence of the 50% Fibonacci retracement and the wedge’s top line, near $2.48 at the latest, appears the key upside hurdle for the Natural Gas buyers to cross to convince the XNG/USD bulls.
Following that, the previous support line from May 05, close to $2.57 by the press time, could challenge the Natural Gas buyers on their way to the falling wedge confirmation’s theoretical target of around $3.00.
Natural Gas Price: Four-hour chart
Trend: Recovery expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
