Global markets focus this week on the resumption of Russian gas flows to Europe via the Nord Stream 1 pipeline, whose maintenance is scheduled to end on July 21. Governments, markets and businesses fear the possibility of an extension of the lockdown due to the war in Ukraine. A loss of this gas would damage Germany, the world's fourth largest economy, and increase the risk of a recession.
No matter how Russia progresses, European countries are implementing gas contingency plans, which include reducing industrial and residential use and rationing and increasing coal-fired power as an alternative to higher prices.
Gazprom cut NS1 gas shipments to Germany by 60% last month, citing technical problems with stranded turbines in Canada. The repaired turbines, which Gazprom said remained in Canada due to Western sanctions, are headed to Russia after the German and Canadian governments reached an agreement.
However, Gazprom said the operation was moving slowly, hinting at a prolonged drop in supplies. NS1, which extends from Russia to Germany, is considered one of the largest gas supply channels in Europe.
Technically, the price continues to rise along a minor bullish slope line in the short term, as shown in the attached chart for a (daily) period, to reach the test of the important resistance level 7.254, as this coincides with touching the resistance of its simple moving average for the previous 50 days, which may double from the strength of that resistance in front of the price, especially with the arrival of the relative strength indicators to areas that are highly saturated with purchases, and exaggeratedly compared to the price movement, which suggests the start of negative divergence in it, to increase the negative pressures on its upcoming trades.
Therefore, we expect the return of the corrective decline of natural gas during its upcoming trading, with the aim of searching for a bullish bottom to take as a base that might help it gain the necessary positive momentum to breach the previously mentioned important resistance level 7.254, and this may push it to rely on the support level 6.361.