European Energy Markets:

Stronger open possible but range may continue

The European energy markets including the TTF, NBP, EUA and German power are set up for a strong trading session this Monday morning. But it is unclear for how much higher the Dutch gas price and other energy prices can go.

Our technical analysis experts at Clever Markets expect a decline to set in towards the end of Monday’s session or on Tuesday, depending on when the hourly chart’s resistance areas are tested.

Take note of the bearish TTF sentiment benchmark. Many traders expect the market to decline this morning. But the energy trading charts are set up for more gains from a technical analysis perspective, although this upside is expected to be short-lived.

So if we get a strong open, many energy traders would be forced out of their short positions, which could initially fuel the upleg.

This is exactly what happened last week, but in reverse. A week ago, Clever Markets correctly identified a weak open despite a strongly bullish sentiment. The market instantly panicked to close out longs which fueled the initial downleg.

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TTF Sentiment Benchmark

The TTF sentiment benchmark switched from strong bullishness last week to strong bearishness this week. The

 market seems to be anticipating a correction to last Friday’s strong gains.

Zooming out, the Dutch TTF gas hub remains range bound at the start of this week and momentum traders may require more confirmation before jumping in.