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Natural Gas Price Forecast – Natural Gas Continues to See a Drift Lower

By:
Christopher Lewis
Published: May 30, 2023, 14:38 UTC

Natural gas continues to drift a bit lower during the Tuesday session.

Natural Gas, FX Empire

In this article:

Natural Gas Price Forecast Video for 31.05.23

Natural Gas Technical Analysis

During Tuesday’s trading session, natural gas prices saw a slight decline in listless trading. The gradual downward movement of natural gas futures suggests a potential move towards the $2.00 level, which has historically served as a significant support level. A breach below this level could lead to further descent towards the $1.80 level, marking the bottom of the overall support area in that specific region.

On the other hand, if a reversal occurs and prices start to rally, the 50-Day Exponential Moving Average could act as a catalyst for a potential move towards the $3.00 level. This level holds psychological significance as a major round figure and attracts significant attention from market participants. Consequently, there would likely be resistance and a struggle for control in that area. Should the price break above the $3.00 level, it could potentially pave the way for a long-term climb towards the $4.00 level.

In general, it is a matter of time before we observe a more sustained “buy-and-hold” scenario in the natural gas market, particularly during the summer months when European countries need to replenish their natural gas storage. With limitations on purchasing Russian gas and finite supply from Norway, the demand for natural gas may rise, potentially shifting the market towards a more bullish outlook as summer comes to a close. This transition could prompt a “fade the rally” approach in the near term.

Currently, the market seems to be oscillating between the $2.00 support level and the $3.00 resistance level. Traders may consider employing a range-bound strategy in the coming weeks to take advantage of short-term opportunities within this price range. However, it is crucial to note that this consolidation phase will eventually lead to a breakout. At present, the market lacks the necessary momentum for a decisive move, but I anticipate this changing later in the year.

Ultimately, the natural gas market is currently confined between the $2.00 and $3.00 levels, creating a range-bound trading environment. While a longer-term bullish scenario is expected in the future, the market’s momentum is currently insufficient. Traders should closely monitor price movements and wait for a clear breakout before considering more substantial positions.

For a look at all of today’s economic events, check out our economic calendar.

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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