XNG/USD pares the biggest daily fall since March around $2.58 amid dicey markets – Crypto News – Crypto News
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XNG/USD pares the biggest daily fall since March around $2.58 amid dicey markets – Crypto News

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  • Natural Gas Price clings to mild gains after falling the most in three months.
  • Market’s consolidation ahead of top-tier data/events allows XNG/USD to lick its wounds at weekly low.
  • Fears surrounding China economic growth, hawkish Fed concerns weigh on energy prices amid firmer US Dollar.

Natural Gas Price (XNG/USD) renews its intraday high near $2.58 as it consolidates the previous day’s heavy losses as markets prepare for fed Chair Jerome Powell’s bi-annual testimony, as well as speeches from multiple central bankers, during early Wednesday. In doing so, the energy instrument also takes clues from China to push back the recession woes.

That said, China’s Ministry of Finance (MoF) recently announced its intention to take drastic measures while cutting the purchase tax during 2024-25 and 2026-27. The same join the market’s concerns that the US data hasn’t been too impressive to allow the Fed policymakers of more rate hikes past July to weigh on the XNG/USD price.

It should be noted that the XNG/USD dropped the most since early March the previous day as the fears of China’s slowdown and higher rates from the key central banks escalated. Furthermore, intensifying tension between the US and China, over Taiwan, also weighs on the XNG/USD price. Recently, China’s Ministry of Foreign Affairs (MoFA) said that the US has distorted its political promise to China.

On the other hand, Fed Governor and Vice Chair Nominee Philip Jefferson said, “I remain focused on returning it to our 2% target.” On the same line, Federal Reserve Governor Lisa Cook said “I am committed to promoting sustained economic growth in a context of low and stable inflation,” in her statement to be given before the Senate on Wednesday. Further, Fed Board nominee Adriana Kugler also mentioned, per the prepared statements for Wednesday’s Testimony, that returning inflation to the central bank’s 2% target is key to setting a strong foundation for the US economy.

It’s worth noting that the US Dollar rose for the third consecutive day on Tuesday, grinding higher of late, as it cheered upbeat housing data. That said, US Housing Starts jumped to the highest level since April 2022 by rising 21.7% MoM in May versus -2.9% (revised from +2.2%) recorded in April and -0.8% market forecasts. On the same line, Building Permits were also upbeat for the said month, up 5.2% MoM versus -5.0% expected and -1.4% from previous readings (revised from -1.5%).

Elsewhere, fears of increased gas supplies from Qatar to China, as well as loads of XNG/USD output in Russia, weigh on the Natural Gas Price.

While portraying the mood, the Wall Street benchmark began the week on the negative side but S&P500 futures remain sidelined whereas the US Treasury bond yields also snapped a two-day winning streak the previous day before posting early-day inaction of late.

Looking ahead, multiple central bankers from the US and Europe are up for their public appearances and can infuse volatility into the markets. Among them, Fed Chair Jerome Powell’s bi-annual testimony will be crucial to watch for clear directions.

technical analysis

Despite the previous day’s fall, the Natural Gas buyers can remain hopeful unless witnessing a daily closing below the convergence of the 100-DMA and a three-week-old rising support line, near $2.44.

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