European Energy Markets:
Bullish for now, despite tentative bearish setup
In short: TTF / NBP / German power/ Brent print bearish candles last Friday but the uptrends remain in place until a break below the respective 23.6% Fib retracements.
At the end of last week, the uptrend on the Dutch TTF, British NBP, German power, and Brent crude market has stalled with a bearish candle setup.
The bearish candles in question on the TTF, NBP and Brent is a dark cloud cover. Our backtests show that this pattern only works out 49% of the time.
The bearish harami on German power only plays out 46% of the time.
It’s like a coin toss!
That’s why we always want to wait for confirmation with those candle patterns.
For now, prices remain above their respective 23.6% Fib retracement, the key threshold for a bearish correction. Until this support level is taken, we continue to follow the bull trend.
Our in-house algos still show strong bull trends with further upside potential under a trending regime.
A fall below the 23.6% Fib retracement levels and the first sign of our Regime Index cooling would be the strongest warning for a bearish correction to start playing out.
Meanwhile, EUA has started to stall near a high-likelihood bearish reversal zone with the regime still stuck in non-trending mode.
Henry Hub has become neutral with a sideways consolidation likely developing after the recent bull trend failed to follow through further.
Downleg triggered below:
- TTF: 75.55
- NBP: 188.10
- German Power: 125.39
- Brent: 104.14
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TTF Sentiment Benchmark
The sentiment remains bullish for a fourth consecutive week.
A bullish bias is also maintained from our side. Keep an eye on the bearish trigger and pull it higher with every price increase. If we were to break lower, a corrective down move would be fast and strong.