European Energy Markets:
Ceasefire hopes could evaporate this Monday
Ceasefire negotiations between the US and Iran are top of mind for energy traders this week. The sentiment benchmark reveals that traders had hopes at the end of last week that something could truly materialise.
But on Sunday, news outlets were already reporting that the deal could fall through with the US shifting the goal post.
The TTF Sentiment Benchmark and the price charts were broadly aligned with that bearish picture at the end of last week. A move lower seemed plausible for many.
Even with a bounce early this week, the bulls won’t be back in charge any time soon. A bounce would rather lead to a wide range before the bears eventually take over. This is a symptom of TACO fatigue.
On the German power front year product we are observing bullish patterns on the hourly and daily charts. However, in-house algos suggest limited upside as the bull trend becomes overextended in a non-trending regime.
EUAs may have peaked out last week. A bearish reversal may launch below €78.39/tCO2e.
On Brent, a decisive break below $90/bbl may likely trigger more long covering amidst promising prospects of a ceasefire deal between the US and Iran.
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TTF Front Month gas outlook
- If €44.78/MWh holds, a break above €48.76/MWh leads to €52.44/MWh.
- However, tools are starting to align with the bears. Upside will be limited.
- Below €44.78/MWh, €40.50/MWh becomes the target.
- Either way, eventual bearishness seems likely.
TTF Sentiment Benchmark
The TTF sentiment is gradually shifting in favour of the bears. Traders take the ceasefire talks in Iran seriously. Bearish potential is also reflected in the charts.
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