Natural Gas Price Forecast – Natural Gas Testing Major Support Level

Natural gas markets have rallied a bit during the course of the trading session on Thursday but have failed to truly break out. At this point, we need to get back over the $5.02 level, as we could go looking towards the 50 day EMA at that point, breaking the resistance over the last 36 hours or so. Keep in mind that natural gas markets are taking a little bit of a beating due to the fact that temperatures in the northeastern part of the United States are rising, but that is a very short-term influence.

NATGAS Video 12.11.21

We are trading the December contract currently, so that is something worth paying attention to, because there will obviously be a lot of demand during the course of the month. The market had gotten to this very high level rather quickly, so it makes quite a bit of sense that we are simply going back and forth. Ultimately, this is a market that I think will try to recover but if we were to break down below the bottom of the hammer that formed during the Wednesday session, then we could see further weakness, perhaps reaching towards the $4.50 level.

The US dollar strengthening probably has a little bit of a knock on effect here, but I do not necessarily think that it is a big deal. The market will continue to be very noisy, but that is typical for natural gas, as it has a much larger volatility profile than many other commodities. Because of this, you need to be very cautious about your position sizing in the near term.

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