European Energy Markets:
Bullish sentiment fading
As expected last week, the Dutch TTF and British NBP drifted marginally lower in a non-trending regime. When our in-house algos signal a sideways market, price moves tend to be short and unconvincing. That’s exactly what happened.
On Sunday, Trump announced that peace talks with Iran have failed and threatened the blockade of the Strait of Hormuz, together with the bombing of critical civilian infrastructure in Iran. If the market reaction is muted this morning, TACO fatigue ahs truly set in.
EUAs have been setting up for a bullish move all of last week. Notice the head-and-shoulders pattern on the hourly chart. All we need now is a convincing daily close above €74.50/tCO2e.
The German power front year futures contract were set up for a move lower lower early this week. But the trump announcement could limit downside or even undo further losses.
Traders are simply exhausted. We have once again entered a period where we are not trading on supply and demand factors. Instead, energy traders are trying to decipher what other traders might think of the latest public meltdown of a senile man…that happens to be the most powerful man in the world.
So what do we do? My suggestion is to keep positions small and on the hourly chart. Now is not the time to have a strong opinion about the longer-term direction of the market.
- Spec traders: In-house algos indicate a weak downleg within a non-trending regime, leaving conditions uncertain. Speculative positioning may be reduced, with the overall stance remaining neutral. Intra-day plays only. Expect sudden price spikes.
- Hedgers: Some buyers may lock in partial volume near €37.96/MWh in anticipation of a bounce. If, however, intra-day charts show no signs of bullish reversal as we approach the level, traders may wish to wait for longer. Anticipate price spikes.
Get the full weekly analysis with actionable TTF insights directly to your inbox for free. Click here.
TTF Front Month gas outlook
- The market traded sideways last Friday, forming a spinning top candle as uncertainty over the ceasefire kept participants sidelined amid thin volume.
- Technical tools remain bearishly aligned, with MACD showing expanding downside momentum and the stochastic supporting continued corrective pressure.
- A likely break below €42.50/MWh (S1) could open the path towards €37.96/MWh (S2), where the 200-day EMA and gap border may act as a strong magnet and potential reversal zone.
- However, in-house algos still indicate a weak bearish trend within a non-trending regime, leaving conditions uncertain. Speculative positioning may therefore be reduced, with the overall stance remaining neutral.
This is the shortened free version available to newsletter subscribers. Contact us to get access to the full dashboard that includes alternative scenarios, multiple timeframes, trigger levels, quant signals, pattern backtests and much more.
Watch the full weekly analysis video here.
TTF Sentiment Benchmark
Confusion leads to apathy. For the first time in seven weeks, TTF traders feel less bullish. The 15 percentage points drop is a result of TACO fatigue.
Want access to the benchmark history? Contact us to get started with Clever Markets.