European Energy Markets:
Path to €100/MWh for TTF
In short: Gas and power now turned bullish. €100/MWh for TTF is possible but not a guarantee.
A broad shift into Trending Regimes last week invalidated our earlier expectations for a deeper bearish correction, sending European gas and power markets sharply higher.
TTF and German Power remain firmly bullish, with persistent uptrends supported by strongly trending regimes. Once €90/MWh is cleared on the TTF front-month product, the path is open to the psychologically important €100/MWh. We might not get there in one swing and it might take a few attempts. Prerequisite is maintenance within the ascending channel.
EUA, however, has once again broken below its prolonged ascending channel, raising the risk of a bearish reversal. EUA continues to behave broadly as expected, with our in-house algos identifying a strongly mean-reverting market where rallies and corrections have remained relatively predictable.
Brent has also turned bullish alongside TTF, although further upside may remain constrained until its Regime Index confirms a shift into a trending regime.
Henry Hub remains under bearish pressure, extending its decline since we shifted to a bearish stance last Tuesday. However, trend conviction has now faded back toward neutral, making speculative plays best avoided or kept small for now.
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TTF Sentiment Benchmark
The bullish sentiment this week has not been this high since early April when EU storage was only 28% full and two Qatari LNG vessels were turned away at the Strait of Hormuz.
Back then, Trump issuing a warning that a whole “civilization will die” might have also contributed to the strong bullish sentiment in April.
Our proprietary tools also indicate that the conditions for more upside are good. Algos, classic TA and fundamentals are all aligned.