U.K. next-month natural gas must break through an area of resistance at 68.15 pence a therm before pushing higher, Futurestechs.com Ltd. said, citing technical indicators.
The level was created by the 38.2 percent retracement of the rally from October to December, Clive Lambert, a technical strategist at Futurestechs in Billericay, England, wrote in an e-mailed research report today. The levels are derived from Fibonacci numbers that some analysts believe hold clues to market movements.
The month-ahead contract jumped 2.5 percent yesterday to 68.5 pence a therm, after reaching 68.75 pence, the most since Dec. 7, according to broker data compiled by Bloomberg. It fell 1.4 percent to 67.55 pence a therm at 9:38 a.m. London time.
“Given the extremity of the gap higher perhaps a minor period of consolidation is necessary and a test of the bulls’ willingness to buy dips needs to be seen before pushing ahead,” Lambert wrote in the note.