Natural Gas Technical Analysis
The natural gas markets have shown themselves to be attracted to the 50-day EMA yet again during the trading session here on Friday, as traders in America are starting to think about the idea that cooler temperatures are on their way.
There are also questions about natural gas supply in the European Union and, of course, whatever that might mean for liquefied natural gas exports coming out of the United States. So it could be a good winner for this market, but we’ll just have to wait and see because it is mainly driven by weather, and weather, of course, is almost impossible to predict with any accuracy farther out.
Supply Still Plentiful in the United States
The current situation right now in the United States is that there is plenty of supply, and that continues to be a bit of an overhang on this market. But I also recognize that could change rather quickly.
The Qatari natural gas supply to the European Union needs to be paid close attention to because, if it gets interrupted again, then we have a situation where the Europeans will probably be forced to buy here.
Also keep in mind that we are now in the November contract in the front month of the futures markets, and it does suggest that we should start to see a little bit more upward momentum. We have over the last couple of months, so I’m more bullish than bearish, but I also recognize this is somewhat neutral at the moment. More of a buy-on-the-dip, short-term trade setup is what I’ve seen recently.
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