Natural gas, gold prices dip while Brent tries to regain yesterday’s losses
The outlook on natural gas and gold has become short-term bearish while that of Brent crude oil remains bullish despite yesterday’s setback.
Gold slips below its 200-day SMA
The gold price continues to oscillate around the 200-day simple moving average (SMA) at $1,841 but is now trading below it for the first time in a week.
Following the publication of less hawkish Federal Open Market Committee (FOMC) minutes last week the price of gold came off its $1,869 late May high with the 18 May low at $1,807 being targeted while no rise back above the 200-day SMA is seen.
Resistance below last week’s high at $1,869 comes in at this week’s high at $1,864 and above it at the April low at $1,873. Further up, the mid- and late March highs can be spotted at $1,891 to $1,895.
Brent crude oil rejected by its March peak
The price of Brent crude oil saw a sharp reversal close to its $120.48 March peak on reports that some producers were considering suspending Russia’s participation in a production deal of the Organization of Petroleum Exporting Countries and Allies (OPEC+), which could pave the way for more oil to be pumped.
On the back of this news the price of Brent crude oil, which briefly traded at $120.62, a level last seen on 9 March, came all the way back down to $115.01 yesterday before rallying again today in anticipation of Shanghai’s re-opening after a two-month lockdown.
The oil price initially rallied on Tuesday after European Union (EU) leaders agreed in principle to cut around two-thirds of Russian oil imports by the end of the year.
If the late March and yesterday’s highs at $120.48 to $120.62 were to be exceeded, the March peak at $131.51 would be back in focus.
Good support can now be found at previous strong resistance, namely between the mid-April to mid-May highs at $114.30 to $113.59.
Natural gas futures give technical sell signal
Natural gas futures are coming off last week’s high at $9.43 despite Russia’s Gazprom cutting gas supplies to Dutch trader GasTerra yesterday and announcing it would also stop gas flows to Denmark’s Orsted and to Shell Energy for its contract on gas supplies to Germany today, after they refused to pay for their gas in Russian roubles.
The natural gas contract has also triggered a technical sell signal by dropping out of its rising wedge formation, slipping through its one-month support line and closing below last Friday’s low at $8.29.
A rising wedge is formed when new highs are being compressed. Generally speaking, this pattern is a bearish chart formation as it indicates a possible trend reversal during an uptrend when the price slips through the lower uptrend line. A bearish trend reversal has now been triggered with a slide back towards the 55-day simple moving average (SMA) at $7.06 at hand.
On the way down minor support can be spotted at the 20 May low at $7.92 and then at the late April high at $7.51.
Minor resistance comes in along the breached one-month support line at $8.69 as well as at Monday’s $8.90 high and stronger resistance between the early and late May highs at $9.01 to $9.43.
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