Natural Gas retreats towards $2.13 support amid economic slowdown fears, EIA inventories eyed - FXStreet
Natural Gas retreats towards $2.13 support amid economic slowdown fears, EIA inventories eyed
- Natural Gas price fades the previous day’s corrective rebound.
- Firmer US Dollar, recession woes weigh on XNG/USD ahead of weekly inventories from EIA.
- Extension of US tax exemption on gas fuels, geopolitical tension joins downbeat US data to put a floor under prices.
Natural Gas (XNG/USD) retreats to $2.25 during early Thursday as the market slips into consolidation mode ahead of Friday’s key US jobs report.
It’s worth noting that the US tax credit and geopolitical woes allowed the XNG/USD to post the biggest daily gains in a week the previous day. However, fears of economic slowdown in the world’s US join the firmer US Dollar to weigh on the energy prices of late.
US Dollar Index (DXY) extends the previous day's rebound from a two-month low to 102.00 by the press time, up 0.12% intraday. Recession woes gain momentum as consecutive weakness in the US employment numbers raised fears of a slowdown in the world’s biggest economy and contagion risk associated with the same, which in turn weigh on the energy demand and XNG/USD price.
On the contrary, House of Representatives Speaker Kevin McCarthy’s talks with Taiwanese President Tsai Ing-Wen renewed the Sino-American tussles. On the other hand, North Korea on Thursday accused the U.S. and South Korea of escalating tensions to the brink of nuclear war through their joint military drills, vowing to respond with "offensive action," state media KCNA reported per Reuters.
It should be noted that the US Senate extends the decade-old tax exemption on natural gas and favor more demand for Natural Gas, putting a floor under the prices of late.
While portraying the mood, S&P 500 Futures drop for the third consecutive day even if the benchmark US Treasury bond yields remain sluggish around the multi-day bottom.
Looking forward, Weekly Natural Gas Storage Change data from the US Energy Information Administration (EIA), prior -47B, could direct XNG/USD moves. Though, major attention should be given to the headlines surrounding China and the second-tier US employment data.
Technical analysis
Although the Natural Gas buyers remain off the table unless witnessing a clear break of the 50-DMA, around $2.51 at the latest, the bears remain cautious beyond the double-bottom surrounding $2.13.
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