Forex▼ Bearish
Natural Gas Breakout Questioned as EIA Lowers Price Forecast
EIA cut Q3 price view to $2.87/MMBtu. A low-volume wedge breakout and record inventories raise doubts about natural gas upside. RSI signal incomplete.
Continue with
The EIA lowered its Q3 natural gas price forecast to $2.87 per million BTU, 50 cents below its previous estimate. FXOpen analysts said the revision reflects higher domestic production and inventories that could create the largest stockpile in a decade before heating season. Planned maintenance at the Freeport LNG export terminal may have added further pressure by reducing demand for gas used in liquefaction.
A descending wedge had formed on the XNGUSD H4 chart. The upper boundary broke to the upside on Aug. 10 after a gap on below-average volume. That volume detail, FXOpen said, calls the conviction behind the breakout into question.
Price has since consolidated between the Point of Control at $2.765 and the upper profile boundary at $2.810. The red resistance at $2.990 is expected to meet price near the base of the pattern.