Natural Gas Price Fundamental Daily Forecast – Pressured by Cooler Forecasts, Underpinned by Firm Spot Prices

Driving the two-side price action is a forecast calling for heat and high humidity until mid-week then a cooling off period into August 30. The odds are in favor of a downside bias because of cooler-trending long-range outlooks and rising production, however, the bulls are being stubborn after picking up support from higher spot prices.
James Hyerczyk
Natural Gas

Natural gas is putting in a mixed performance early Tuesday shortly before the regular session opening. The market is currently trading lower after giving up earlier gains, however, the range is too small to determine if the buyers or sellers have the upper hand today.

Technical factors also continue to play a role in the price action with the market locked inside a pair of retracement zones at $2.191 to $2.226 and $2.159 to $2.132. Something has to give sooner or later. If an upside bias develops then $2.278 to $2.332 will become the primary target. If a downside bias forms then look for a possible retest of the contract low at $2.045.

At 11:37 GMT, October Natural Gas is trading $2.195, down $0.018 or -0.81%.

Driving the two-side price action is a forecast calling for heat and high humidity until mid-week then a cooling off period into August 30. The odds are in favor of a downside bias because of cooler-trending long-range outlooks and rising production, however, the bulls are being stubborn after picking up support from higher spot prices.

Daily October Natural Gas

Short-Term Weather Outlook

According to NatGasWeather for August 20 to August 26, “Strong high pressure will dominate the western and southern U.S. with highs of 90s to 100s, hottest from California to Texas for strong demand. High pressure will briefly extend across the Midwest and East today with highs warming into the upper 80s to near 90 degrees Fahrenheit from Chicago to New York City, then cooling Thursday through the weekend as a weather systems arrives with showers and highs of 70s and 80s. Overall, national demand will be high through mid-week then easing to moderate.”

Daily Forecast

The daily forecast remains the same as yesterday’s because the market is still trading in a range.

The main trend is down according to the daily swing chart. A trade through $2.045 will signal a resumption of the downtrend. The main trend will change to up on a trade through $2.338.

The new minor top is $2.273. A trade through this level will change the minor trend to up. This will also shift momentum to the upside.

The market is also bouncing around a pair of technical retracement zones at $2.191 to $2.226 and $2.159 to $2.132. Trading between these retracement zones may be an indication that traders have priced in the two-sided weather forecast.

Look for a potential upside bias to begin on a sustained move over $2.226 and for the downside bias to resume on a sustained move under $2.132.

Recent data from the Commodity Futures Trading Commission (CFTC) showed that money managers boosted their net short positions to more than 200,000 contracts, the most bearish data since 2015. So if there is a rally then it will likely be fueled by short-covering, which means it won’t last although it has the potential to look spectacular on the daily chart. If short-sellers decide they want to punish the speculative buyers then they’ll keep increasing their positions until they run out of foolish bottom-pickers.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US