Against the backdrop of heat in the United States may increase the demand for electricity for air conditioners
In this review, we suggest to consider the Personal Composite Instrument (PCI) Gas vs Ruble. It reflects the price dynamics of US natural gas versus Russian ruble. Will the GAS/RUB quotations increase ?
Such movement indicates that natural gas in the United States becomes more expensive, and the ruble is weakened. The Bank of Russia lowered its key rate at a meeting on June 14, 2019 to 7.5% from 7.75%. At the same time, inflation in Russia is 5.1%, which is significantly higher than the target level of the Central Bank of the Russian Federation (4%). The Russian regulator reduces the rate in order to maintain very weak economic growth and prevent capital outflow. Against the background of relatively high inflation and actual stagnation in the economy, this may adversely affect the ruble exchange rate. In turn, the possible growth of quotations of natural gas in the United States can contribute to an increase in demand for electricity for air conditioners during the hot weather in the United States. The agency Refinitiv predicts an increase in gas consumption in the US next week to 87.2 billion cubic feet per day compared to 83.4 billion this week. Another factor in favor of the growth of quotations could be an increase in the capacity of terminals for the export of American liquefied natural gas from the current level of 5.7 billion cubic feet per day to 7.4 million by the end of 2019 and to 10 million by 2020. At the same time, U.S. Energy Information Administration does not expect further significant growth in US gas production. According to its forecast, on average for the entire current year it will be 90.6 billion cubic feet per day. Whereas production this week has already reached 89.9 billion.
On the daily timeframe GAS/RUB: D1 moved closer to the resistance line of the downtrend. It must be punched up before opening a buy position. Various technical analysis indicators have generated upside signals. Further growth of quotations is possible if the demand for gas in the United States increases and the Russian ruble weakens.
Technical Analysis Summary
Position Buy
Buy stop Above 150
Stop loss Below 135
In this review, we suggest to consider the Personal Composite Instrument (PCI) Gas vs Ruble. It reflects the price dynamics of US natural gas versus Russian ruble. Will the GAS/RUB quotations increase ?
Such movement indicates that natural gas in the United States becomes more expensive, and the ruble is weakened. The Bank of Russia lowered its key rate at a meeting on June 14, 2019 to 7.5% from 7.75%. At the same time, inflation in Russia is 5.1%, which is significantly higher than the target level of the Central Bank of the Russian Federation (4%). The Russian regulator reduces the rate in order to maintain very weak economic growth and prevent capital outflow. Against the background of relatively high inflation and actual stagnation in the economy, this may adversely affect the ruble exchange rate. In turn, the possible growth of quotations of natural gas in the United States can contribute to an increase in demand for electricity for air conditioners during the hot weather in the United States. The agency Refinitiv predicts an increase in gas consumption in the US next week to 87.2 billion cubic feet per day compared to 83.4 billion this week. Another factor in favor of the growth of quotations could be an increase in the capacity of terminals for the export of American liquefied natural gas from the current level of 5.7 billion cubic feet per day to 7.4 million by the end of 2019 and to 10 million by 2020. At the same time, U.S. Energy Information Administration does not expect further significant growth in US gas production. According to its forecast, on average for the entire current year it will be 90.6 billion cubic feet per day. Whereas production this week has already reached 89.9 billion.
On the daily timeframe GAS/RUB: D1 moved closer to the resistance line of the downtrend. It must be punched up before opening a buy position. Various technical analysis indicators have generated upside signals. Further growth of quotations is possible if the demand for gas in the United States increases and the Russian ruble weakens.
- The Parabolic indicator indicates downtrend signal. It can be used as an additional resistance level that must be overcome before opening a buy position.
- The Bolinger bands widened, indicating high volatility.
- The RSI indicator is below 50. It has formed a divergence to increase.
- The MACD indicator shows a weak uptrend signal.
Technical Analysis Summary
Position Buy
Buy stop Above 150
Stop loss Below 135