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Natural Gas Price Forecast – Natural gas markets drift lower

By:
Christopher Lewis
Updated: May 30, 2019, 14:40 UTC

Natural gas markets directed a bit lower during the trading session on Thursday, as we continue range bound trading. The market looks as if it isn’t ready to go anywhere anytime soon, which is much of a surprise.

Natural gas daily chart, May 31, 2019

Natural gas markets belted during the trading session on Thursday, so signs of exhaustion just below the 50 day EMA. This is a market that is very bearish overall, but we are in extreme lows so it does keep it somewhat supported. If we do breakdown below the $2.50 level, the market could go much lower, perhaps down to the $2.25 level followed by $2.00 level.

NATGAS Video 31.05.19

The 50 day EMA above be broken allows the market to go looking towards the $2.70 level, possibly even the $2.80 level. This time of year is not conducive to higher pricing though, so don’t be surprised that rallies continue to get sold. In fact, it’s not really until you reach November a longer-term uptrend can be established that holds for any significant amount of time. With temperatures reaching the 80s and 90s in the northern part of the United States, it’s very unlikely that there will be huge demand for natural gas anytime soon. Add to that the fact that the global economy pulling back a bit, industrial demand for natural gas will probably continue to wane as well.

Selling short-term rallies should continue to be the best way to trade this market, and I believe it these levels that I have mentioned could give you plenty of opportunities to get involved. I also suspect that we break down below the $2.50 level, the market will accelerate to the downside rather rapidly and perhaps catching a lot of people off guard. I have no interest in buying this market anytime soon.

Please let us know what you think in the comments below

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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