Natural Gas Price Forecast – Natural Gas Continues to Be Noise Driven

Christopher Lewis
Published: Jun 24, 2024, 13:21 GMT+00:00

The natural gas market continues to see a lot of noise overall, as there is almost no clear short-term direction. While we rallied for a while, the reality is that this time of year typically isn’t very good for this market.

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Natural Gas Technical Analysis

Natural gas has done pretty much nothing but make a lot of noise in the early hours on Monday, which makes quite a bit of sense because quite frankly, this is typically not a very bullish time of year. Yes, there has been a heat wave in the United States, but do not be surprised at all to see the market start plunging again, because, quite frankly, that’s done. So, it probably won’t take that long to start refilling supplies.

There is a little bit of drive from the European Union as they can’t seem to get it together either with supply. So maybe that would put a little bit of a floor in the market. And I do think that in the longer term, there’s most certainly a floor in the market. I like the idea of buying dips. I’m already long in this market via an ETF, but it’s not levered. So, I don’t really have to worry about as many issues as some of you out there that are piling into futures contracts or even large CFD contracts.

A small position on dips makes sense because given enough time, we could see buyers push this market to the upside and break above the $3 level. But I think that happens sometime later in the year as we start to approach fall. So that’s why I use an ETF. I don’t really care about day-to-day fluctuations. Natural gas is a great market to lose money in and most retail traders find that out really quickly. Remember, it’s driven by supply and demand, transmission, the lines in America, for example, and of course, the weather patterns of the Northeast and part of the United States.

Peripherally, you can add whether or not Russian gas is being bought by Europeans who are currently at war with them peripherally via transmission through Ukraine. So, you can see how much nonsense it’s kind of baked into this market. When you say that out loud, looking at the four hour chart from a bit of a distance, you can see that we are also perhaps in the middle of a rising wedge. So maybe another shot higher and then a plunge that could put us down to about $2.33, which is a very viable price this time of year. At that point, I would probably be looking to add to my ETF position.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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