Spot natural gas prices (CFDS ON NATURAL GAS) stabilized at a decrease in the recent trading at the intraday levels, to achieve slight daily gains until the moment of writing this report, by 0.94%. It settled at the price of $7.851 per million British thermal units, after falling sharply during trading. Yesterday, the rate was -6.65%.

Natural gas prices extended their losses yesterday, in part due to the weather forecast for the second half of August, which shows milder temperatures in the East, Midwest and part of the southwest US, this may reduce gas demand in the energy sector and ease market pressure.

How does weather affect Natural Gas?

The weather forecast also remains optimistic with NOAA’s 6- to 10-day forecast showing hotter-than-normal conditions across the entire US except for part of the Southwest.

September gas futures contracts on Nymex were down 57.7 cents at $7.706 per million British thermal units. While the futures contract for the month of October in the Nymex fell 56.2 cents to $ 7,698.

While spot gas prices extended NGI’s Spot Gas National Avg even as temperatures soared across much of the United States, an estimated loss of 33.0 cents to $7,810.

Meanwhile, Russian President Vladimir Putin said the West launched an economic war aimed at destroying Russia and its economy and promised to sell Russia’s vast energy resources to countries in Asia like China if European customers didn’t want to buy them.

Kremlin-controlled Gazprom has reduced flows through Nord Stream 1, the largest single pipeline carrying Russian gas to Germany, to 20% of capacity due to what it describes as defective equipment, notably a delayed return of the SGT-A65 turbine.

Germany has said the turbines are an excuse and that Moscow is using gas as a political weapon, and German Economy Minister Robert Habeck said last month: “They don’t have the courage to say, ‘We are in an economic war with you’.”

 Natural Gas Technical Outlook

Technically, natural gas broke yesterday the current support level of 8.054, as part of its attempt to search for a bullish bottom. It can take it as a base that might help it gain the necessary positive momentum to regain its recovery, amid the negative signals on the relative strength indicators. This is in front of the dominance of the main bullish trend in the medium term and its trading along the line of a minor bullish slope. This is shown in the attached chart for a period of time (daily), with the continuation of the positive support for its trading above its simple moving average for the previous 50 days.

Therefore, we expect more corrective decline for natural gas during its upcoming trading, as long as it remains below 8.054, to target the pivotal support level 7.254.

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Spot natural gas prices (CFDS ON NATURAL GAS) slightly increased in their recent trading at the intraday levels, to achieve daily gains until the moment of writing this report by 0.51%, after it also rose slightly in yesterday’s trading by 1.88%.

European natural gas prices fell sharply on Wednesday, after a strike by Norwegian oil and gas workers threatened to put further pressure on a market already under heavy pressure from the Russian war in Ukraine.

Natural gas futures rebounded early Wednesday, as production fell and demand due to near-term weather remained elevated. However, the spot month fell by midday as traders digested expectations for a strong storage injection, and struggled to regain momentum.

Gas futures for August in Nymex eventually fell 1.3 cents on the day and settled at $5,510. The September contract fell by about half a cent to $5.482 / million British thermal units.

The US Energy Information Administration (EIA) inventory report due for release on Thursday, covering the week ending July 1, is likely to carry increased importance in the market after consecutive bearish accumulations, and the price may swing in either direction as the natural gas market looks to establish stronger support.

The results of a Bloomberg survey showed that the average injection is estimated at 75 billion cubic feet. The forecast extended from 70 billion cubic feet at the minimum to 85 billion cubic feet at the maximum.

Technically, the price settles below the resistance level 5.660, amid the dominance of a bearish corrective wave in the short term, with the continuation of negative pressure for its trading below the simple moving average for the previous 50 days, as shown in the attached chart for a period of time (daily), but in front of that we notice the influx of positive signals. Relative strength indicators helped the price to consolidate until that moment.

Therefore, our forecasts indicate a decline in natural gas during its upcoming trading, especially throughout its stability below the level of 5.660, to target the support level of 4,742.

Spot natural gas prices (CFDS ON NATURAL GAS) slightly decreased in their recent trading at the intraday levels, to record daily losses until the moment of writing this report, by -0.05%. It settled at the price of $8.622 per million British thermal units, after declining during yesterday’s trading by – 0.94%.

July gas futures settled at $8.609 per million British thermal units, down 24.1 cents on the day, spot month was down 11.3 cents on Friday, and August futures on Monday were down 24.8 cents at $8.619.

NGI’s Spot Gas National Avg spot gas prices went in another direction, buoyed by strong demand for near-term cooling in the US, rising 42.0 cents to $8.635.

Futures traded at a July high of $9,664 early last Wednesday, amid strong domestic and global demand for relatively modest US supplies. However, futures contracts have since struggled to gather and maintain momentum. It comes amid the uncertainty created by Wednesday’s explosion at the Freeport LNG export terminal.

Freeport officials have indicated that the station will remain offline for at least three weeks. However, market participants braced for a longer outage that could hamper US exports to Europe. Demand from the continent accelerated as countries there protested Russia’s invasion of Ukraine by backing off gas from Russia. They turned to US LNG to fill the gap, thereby boosting futures contracts for most of the spring.

The gas that would have been exported from Freeport is now available for local consumption or storage for the coming winter. This eased concerns about insufficient supplies to meet strong domestic demand for cooling in the summer, and for utilities’ need to store gas away from the winter heating season.

Technically, the price is trying to search for a bullish bottom to take as a base that might help it gain the necessary positive momentum to regain its recovery. This is despite the dominance of the main bullish trend in the medium and short term along a slope line, as shown in the attached chart. The continuation of the positive support traded above its simple moving average for the previous 50 days. In addition, we notice that the RSI reached oversold areas, exaggeratedly compared to the price movement.

Therefore, we expect the rise of natural gas to return during its upcoming trading, but first it should return to stability above the resistance level 8.870, after which it will target the pivotal resistance level 9.550.

The pair will likely keep falling, with the next reference level being at 1.2900.

Bearish View

• Sell the GBP/USD pair and set a take-profit at 1.2900.
• Add a stop-loss at 1.3080.
• Timeline: 1 day.

Bullish View

• Set a buy-stop at 1.3060 and a take-profit at 1.3150.
• Add a stop-loss at 1.2950.

The GBP/USD remained under pressure ahead of the upcoming UK consumer and producer inflation data. It is trading at 1.300, where it has been in the past few days. This price is near the pair’s lowest level since 2020.

UK Inflation Data Ahead

The GBP/USD pair has been in a strong bearish trend in the past few weeks because of the overall strong US dollar. Investors have been worried about the rising bond yields, which have signaled that the Fed will be more hawkish in the coming months.

The US published strong inflation data on Wednesday. The headline CPI came in at 8.5%, which was slightly better than what analysts were expecting. Core CPI, which excludes volatile items like food and energy rose to 6.6%.

The next key catalyst for the GBP/USD pair will be the latest inflation data from the United Kingdom that are scheduled for Wednesday. Economists expect these numbers to show that the headline consumer price index rose from 6.2% in February to 6.7% in March. On a month-on-month basis, they expect that inflation fell from 0.8% to 0.7%. The US will publish the PPI numbers today.

Meanwhile, economists expect that the core CPI declined from 0.8% to 0.55 on a MoM basis. This decline is expected to have translate to a year-on-year gain of 5.4%. The UK and other European countries are expected to see more inflation because of the ongoing crisis in Ukraine.

These numbers will come two days after the UK published weak GDP numbers. The data showed that the economic growth was a bit limited in February. On Tuesday, numbers revealed that the unemployment rate dropped in February. Wage growth continued to lag inflation.

GBP/USD Forecast

The daily chart shows that the GBP/USD pair has been in a strong bearish trend for almost a year. It has declined by more than 8.68% from the highest point in April last year. And now, the price has found a strong support at around 1.300, which was the lowest level this year. It gas also moved below all moving averages and the Ichimoku cloud. Therefore, the pair will likely keep falling, with the next reference level being at 1.2900.

We expect the pair to vary as long as it stabilizes within the aforementioned rectangle range.

Today’s recommendation on the lira against the dollar

Risk 0.50%.

None of the buy or sell transactions of yesterday were activated

Best entry points buy

• Entering a long position with a pending order from 14.55 levels
• Set a stop loss point to close the lowest support levels 14.36.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 75 pips and leave the rest of the contracts until the strong resistance levels at 15.00.

Best selling entry points

• Entering a short position with a pending order from 14.87 levels.
• The best points for setting the stop loss are closing the highest levels of 14.98.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 75 pips and leave the rest of the contracts until the support levels 14.40

The lira continues to trade unchanged since the middle of last week, after recording a series of declines after the Russian invasion of Ukraine. In terms of data, reports from inside Turkey showed a high level of hunger, which is an indicator that shows how much a family of four people must spend in exchange for a balanced diet by about 675 liras, to total about 4900 liras. This exceeds the minimum wage approved by Turkish President Recep Tayyip Erdogan Ok Erdogan over the past month. The main reason for this rise is the inflation number recorded in the country so far, which is close to its highest level in nearly twenty years, which has caused a decline in the purchasing power of citizens. Inflation rose under the influence of a number of factors, the most prominent of which was the depreciation of the lira, which was affected by the policy of the Turkish President, who insists on lowering interest rates.

On the technical front, the Turkish lira settled against the dollar without significant changes for the second week in a row. The pair settled within a narrow range on the 240-minute time frame, which is shown through the rectangle on the chart. However, the pair in general is trading within the general continuous upward trend with the pair stable above the moving averages 50, 100 and 200, respectively, on the daily time frame, the four-hour time frame, and trading between these averages on the 60-minute time frame. The pair is trading the highest levels of support that are concentrated at 14.75 and 14.66 levels, respectively. On the other hand, the lira is trading below the resistance levels of 14.85 and 15.97, respectively. We expect the pair to vary as long as it stabilizes within the aforementioned rectangle range, where the pair targets 14.50 levels in the event of a decline. In the continuation of the rise, 15.26 levels, it represents 61 Fibonacci for the last bearish wave, which started at 20-12-2021 and ended at 23-12-2021. Please adhere to the existing numbers in the recommendation with the need to maintain capital management.