European Energy Markets:
The bulls are taking a breather
The bulls have been taking a breather on the TTF, NBP and German Power markets. An earlier runaway bull market gave way to a drawn out congestion last week. While prices are holding firmly above the 38.2% Fib on those markets, we are only dealing with a shallow downside correction.
The start of a new week, a new month, and Europe being in full holiday mode could be some of the reasons for the push sideways last week.
Keep an eye on the hourly chart’s symmetrical triangle on the TTF, NBP and German power. Upside resolution of the pattern would reassure the bulls.
A move lower, however, would not put the bears in charge immediately. We would then only be dealing with a deeper correction in an underlying uptrend.
The Clever Markets Trend Indicator flags a highly indecisive market. This typically leads to high volatility and frequent false breaks.
- Speculative traders: Traders may hold off due to uncertainty over the extent of the bearish correction that shows signs of bottoming out.
- Physical Buyers: Slow down buying as chances are evenly split between corrective downside continuation and a drift sideways.
Brent may continue sideways for some time. Eventual upside is likely.
EUA may continue to edge lower to the channel support near €80.40/tCO2e/ A bounce is expected from there.
Henry hub continues lower.
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TTF Sentiment Benchmark
Because last week turned out to be a shallow correction only (for now), the bulls remain the dominant force on the sentiment benchmark. This is in alignment with eventual upside expectations on the chart.