European Energy Markets:
Bears aren’t done yet – expect a bounce before continuing lower
Last week’s downside played out as anticipated. It wasn’t so much the classic TA tools that helped us with the assessment but rather our proprietary algos. Because they showed us that we have entered a bearish reversal zone.
The bulls were long exhausted and a push lower on the TTF, NBP, German Power and Brent markets were likely. The unexpected US-Iran ceasefire agreement only accelerated the down move that was already in the cards.
EUAs could push a bit higher this week towards €82/tCO2e before declining past €79.50/tCO2e.
For Brent, a move above $83.83/bbl could lead to $93.82/bbl.
So where do we go from here for the TTF, NBP and German power?
Most key markets have found some support at the end of last week. But our in-house tools reveal that the bears aren’t done yet. We might see more extensive corrective moves higher early this week, but eventual downside remains the preferred scenario.
Our methodology is now signalling the following:
Spec Traders: Stay short-biased. Use strength to sell. This is a correction, not a reversal.
Physical Buyers: Don’t rush. Wait for deeper capitulation—better value lies ahead.
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TTF Front Month gas outlook
- Likely rise to €44.38/MWh early this week. If the level holds, The bears will continue lower towards €40/MWh again.
- A less likely move above €44.38/MWh could lead to €47.02/MWh.
TTF Sentiment Benchmark
From being dominantly bearish last week, the market starts out this new week with a slight bullish bias. This is broadly aligned with the bullish corrective move anticipated with our algos and classic TA tools.
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