Natural Gas Price Analysis – Natural Gas Bounces from a Big Figure

Natural Gas Technical Analysis

The natural gas markets initially fell to kick off the Monday session but look to be supported by the 50-day EMA and perhaps even more importantly, the $3 level. I think what we have here is a market that has a lot of questions to ask because we’re trading the July contract, and the July contract typically sees some heat and therefore a certain amount of air conditioning demand coming out of the United States.

So, it’s a little bit of a slightly stable season because the markets won’t sell off too much. Now, that being said, I don’t necessarily think it’s a very bullish time of year, and the idea of peace breaking out in the Middle East does perhaps open up the possibility of liquefied natural gas exports into Europe, so that may calm things down this winter, at least from an export standpoint.

Technical Ranges and Geopolitical Factors

But really, I think what we’re going to have to contemplate is how much damage has been done to the Qatari natural gas production ability. In the short term, I think we’re just hanging around between the 50-day EMA on the bottom end and the 200-day EMA on the top.

If we were to break down below the $3 level, then it opens up a move down to the $2.75 level, which I do think we will test sooner or later. If we were to break above the $3.40 level, then maybe we would go to the $3.50 level. All things being equal, this is a sideways market. It has been that way for a couple of weeks. I think we’re just kind of hanging around and waiting to see what actually happens with the Iranians.