Advertisement
Advertisement

Natural Gas Price Forecast – Natural Gas Markets Give Up Early Gains

By:
Christopher Lewis
Published: Dec 31, 2020, 17:08 UTC

The natural gas markets rallied significantly during the trading session on Thursday but gave back the gains as soon as we filled the previous gap.

Natural Gas

In this article:

Natural gas markets rallied a bit during the trading session on Thursday as we ended up filling the gap midday. By the time we got to fill the gap though, we sold off again, and it looks as if the 200 day EMA is going to continue to offer a bit of resistance. Ultimately, this is a market that I think continues to see a bit of selling pressure due to the fact that warmer than anticipated temperatures are forecasted for the month of January. Remember, this pair tends to be very sensitive to the short-term weather reports more than anything else. That being said, the winter has been a bust as far as demand is concerned, and therefore it is not a huge surprise that we continue to struggle.

NATGAS Video 04.01.21

To the upside, even if we break above the top of the candlestick for Thursday, then the 50 day EMA will probably cause significant issues. That being said, I am looking for signs of exhaustion to sell. This candlestick on Thursday could be that sign as well, and if we break down below the candlestick for the trading session on Thursday, then I anticipate that we could go looking towards the $2.26 level again.

On the other hand, if we continue to see warmer temperatures, we could go as low as $2.00 underneath which is a large, round, psychologically significant figure, and an area that that has been important multiple times in the past. Pretty soon, we will be looking at the spring contracts as we are already trading the February contract, which of course means that the “bullish season” will probably be over with soon.

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.

Did you find this article useful?

Advertisement