• Natural Gas Price edges higher at two-week top, prints five-day winning streak.
• US Dollar consolidates the biggest daily fall in six weeks amid market’s preparations for US data.
• Hopes of more energy demand due to adverse weather conditions and China stimulus hopes favor XNG/USD buyers.
• Risk catalysts, US data for clear directions as bulls keep the reins.

Natural Gas Price (XNG/USD) remains on the front foot for the fourth consecutive day, up 0.80% intraday near $2.80 by the press time of early Wednesday in Europe. In doing so, the energy instrument struggles to justify the recent corrective bounce in the US Dollar Index (DXY) after it posted the biggest daily loss in six weeks.

Also likely to have favored the XNG/USD buyers could be the previous day’s upbeat US data that drowned the Greenback amid dovish bias about the Federal Reserve (Fed). It’s worth noting that the chatters about increasing energy demand in the US due to the adverse weather conditions and China’s readiness for more stimulus also keep the Natural Gas buyers hopeful.

The US data flagged fears of the Fed’s policy pivot in 2023 as Chairman Jerome Powell’s Jackson Hole speech highlighted the data dependency for future moves. With this, the CME’s FedWatch Tool signaled a 16% chance of a rate hike versus 20% prior. The same propelled Wall Street benchmarks and weighed on the US Treasury bond yields, as well as the US Dollar.

That said, the US Conference Board’s (CB) Consumer Confidence Index gained major attention as it slumped to 106.10 for August from a downwardly revised 114.00 prior (from 117.0), versus 116.0 market forecasts. That said, the US JOLTS Job Openings slumped to the lowest since March 2021, to 8.827M for July versus 9.465M expected and 9.165M prior (revised from 9.582). Additionally, the US Housing Price Index eased to 0.3% MoM for June from 0.7% prior and 0.2% while the S&P/Case-Shiller Home Price Indices improved to -1.2% YoY from -1.7% previous readings and -1.3% market forecasts.

It should be noted that China’s dislike to the US Commerce Secretary Gina Raimondo’s complaints about the hardships for the US firms in China prod the XNG/USD buyers. On the same line could be the International Monetary Fund’s (IMF) readiness to be more cautious while allocating the Special Drawing Rights (SDRs) in the future, due to the current environment of higher interest rates and inflation.

While portraying the mood, S&P 500 Futures struggle to extend the three-day uptrend while the US Dollar Index (DXY) remains sidelined around 103.55 after falling the most in six weeks. That said, the US Treasury bond yields remain sidelined at a two-week low.

Moving on, US ADP Employment Change, the final readings of the US second quarter (Q2) Gross Domestic Product (GDP) and the Personal Consumption Expenditure (PCE) are the key to watch for clear directions of the XNG/USD. Also, headlines about China, tropical storm Idalia and weather conditions in the US are extra catalysts for Natural Gas price.

Technical analysis

Sustained trading beyond the 21-DMA resistance-turned-support around $2.75 keeps the Natural Gas Price positive for the bulls. Additionally challenging the XNG/USD bears is an upward-sloping support line from early June, close to $2.65 by the press time.