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Natural Gas Price Forecast – Natural Gas Markets Show Resiliency

By:
Christopher Lewis
Published: Jul 24, 2020, 16:08 UTC

The natural gas markets pulled back on Friday, but then turned around to find support underneath the 50 day EMA so it continues to offer buying opportunities.

Natural Gas

Natural gas markets initially fell during the trading session on Friday but turned around to show signs of life again as the market broke above the $1.80 level. With that in mind, I believe it is only a matter of time before we go looking towards the $1.90 level, and then eventually the $2.00 level were close to that as the 200 day EMA is sitting at the $1.97 level. With all of that being said, I like the idea of buying dips and I recognize that the natural gas market still has a lot of headwinds ahead a bit, but with companies in the United States going bankrupt due to the low commodity prices, that is eventually going to wear upon the supply. Furthermore, we have seen extraordinarily hot temperatures the United States, driving up demand.

NATGAS Video 27.07.20

From a longer-term cyclical standpoint, I do not like natural gas. There is simply far too much out there, and it is far too easy to get out of the ground to think that we are going to see $5.00 natural gas anytime soon. That being said, it does look like we are forming a little bit of a basing pattern, and in the short term one would have to acknowledge that the market seems to be stuck between the $1.50 level on the bottom, and the $2.00 level on the top. I think we play this range until colder temperatures come in the United States later this year, which could drive price of, but we will cross that bridge when we get there. In the meantime, it looks like we are going to the top of the previously mentioned range.

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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