As the chart shows, the price of XNG fell below 2.040 on January 31 for the first time since August 2020. This was facilitated by:
→ seasonal trend, because towards the end of winter the price of natural gas tends to fall;
→ weather data. Temperatures could remain above average and snowfall amounts will decrease across North America, according to the U.S. Climate Prediction Center and AccuWeather.
However, the chart shows signs of increased demand:
→ the RSI indicator forms divergence;
→ the bears were unable to reach the lower boundary (shown on the chart) of the downward channel.
Signs of increased demand could come from short covering after the XNG price fell by more than 25% this year, as well as sentiment ahead of the release of news on gas reserves (today at 18:30 GMT+3).
It is possible that the news release will provoke even greater demand activity, and the XNG price will reach the median line of the shown channel.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.