Natural Gas at 14 year highs after EU agrees to cut 15%

Earlier today, EU member states agreed to voluntarily cut their use of Russian gas by 15% as fears increase that Russia may shut off gas flow completely heading into the European winter months. This was despite earlier protests by some Eurozone countries that don’t rely on Russia gas as much as others, such as Spain and Portugal. However, in the end, the proposal was agreed. On Monday, Gazprom announced that it would be halving the amount of gas supply to Europe, from 40% capacity to 20% capacity due to equipment repairs. However, many believe this may just be another tactic used by Russia as political leverage due to the war in Ukraine. Ukrainian President Zelensky went as far as to call the move by Russia “gas blackmail”.

What is Natural Gas and how do you trade it?

US Natural Gas Futures traded on the NYMEX made 14-year highs today as mounting fears sent prices soaring. Natural Gas briefly took out the highs from June 8^th, reaching an intra-day high of 9.752.

Source: Tradingview, NYMEX

Thus far today, spot market natural gas has come up just short of the 14-year high, reaching a high of 9.526 vs the June 8^th highs of 9.588. Resistance above the June 8^th highs cross at the 127.2% Fibonacci extension from the highs on June 8^th to the lows of July 6^th, near 10.733. Above there, trendline resistance dating to February 2^nd crosses near 11.345 and then the 161.8% Fibonacci extension from the previously mentioned timeframe near 12.189. First support crosses at today’s low near 8.665. Below there, price can fall to horizontal support at 7.548 and 6.782. Note that we can’t draw Fibonacci levels yet, as we don’t know if today is the high of the move.

Source: Tradingview, Stone X

Trade Natural Gas now: Login or Open a new account!

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore

The scare in gas prices is having a knock-on effect on EUR/USD. The pair was down over 100 pips intra-day. EUR/USD has been confined to a range between 1.0127 and 1.0278 since July 18^thas markets wait for tomorrow’s FOMC decision. However, the pair is threatening the bottom level today as fears of winter gas supply weigh on the Euro. If price fall below 1.0127, the next level of support isn’t until the lows of July 14^th at 0.9952, then the bottom trendline of a long-term downward sloping channel near 0.9900. First resistance is at the highs from July 21^st at 1.0278, then a strong previous support level (now resistance) near 1.0340/1.0350. Just above there is the 50% retracement level from the highs of June 9^th to the lows of July 14^th at 1.0364.

Source: Tradingview, Stone X

Trade EUR/USD now: Login or Open a new account!

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore

Natural gas prices have been on the rise. If Russia continues to harass Europe by threatening to shut off gas flows, the commodity could move much higher. However, if Europe is able to secure enough gas for the winter, prices should move lower. Watch for knock-on effects in the Euro as jitters may send EUR/USD lower.

Learn more about commodity trading opportunities.

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.