Natural Gas recovery fades around $2.45 as traders skate on thin ice ahead of Fed

• Natural Gas price retreats after bouncing off one-month low the previous day.
• Hopes of more energy demand, geopolitical fears earlier allowed XNG/USD to rise.
• Pre-Fed anxiety joins China President Xi’s failure to confirm more gas pipelines from Russia to probe buyers.
• Risk catalysts, EIA inventories will be important for clear directions.

Natural Gas (XNG/USD) price struggles to keep the previous day’s rebound from the monthly low as global markets turn lackluster ahead of the key Fed monetary policy meeting on Wednesday. Also challenging the XNG/USD price could be the recent headlines from China and the cautious mood ahead of Thursday’s official Weekly Natural Gas Storage Change number from the US Energy Information Administration (EIA). That said, the energy resource remains mildly offered at around $2.44 by the press time.

News that Russia will install new pipelines to send more Natural Gas to China joined the market’s hopes of overcoming the banking fallouts to underpin the XNG/USD buyers the previous day. However, China President Xi Jinping did not confirm such an agreement and pushed back the gas buyers afterward.

Elsewhere, Japan’s two trillion Yen stimulus to ward off the inflation burden on the citizens, by way of energy subsidies to households, seem to have also underpinned the Natural Gas price before the latest retreat.

It should be noted that the recently mixed US data and the market’s hawkish calls of witnessing a 0.25% rate hike from the US Federal Reserve also weigh on the commodity price even if the US Dollar fades the previous day’s rebound from a five-week low.

Furthermore, Bloomberg’s news that Italy floats new Liquefied Natural Gas (LNG) terminals to overcome Russia-led energy shortage join the hopes of easy winter in Europe to challenge the XNG/USD buyers.

It should be noted that the Natural Gas price should witness a rebound in case today’s Fed decision drowns the US Dollar and/or there prevails a huge draw in the weekly EIA inventories, prior -58B.

Technical analysis

The 10-DMA hurdle surrounding $2.53 challenges XNG/USD buyers even if the oversold RSI (14) joins multiple levels near $2.35-30 to test the Natural Gas bears.