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Natural Gas Price Fundamental Daily Forecast – Price Action Suggests Weather Forecasts May Be Changing

By:
James Hyerczyk
Published: May 21, 2018, 10:46 UTC

Traders are likely to continue to battle over the whether weekly injections will be enough to fill the current supply gap. This seems to be enough to create a choppy, two-sided trade.

Natural Gas

Natural gas prices are trading lower early Monday. Technical factors are contributing to the move. On Friday, the market formed a potentially bearish closing price reversal top chart pattern. This chart pattern was confirmed earlier today.

At 1027 GMT, July Natural Gas futures are trading at $2.855, down $0.024 or -0.83%.

Natural Gas
Daily July Natural Gas

The main trend is up according to the daily swing chart so the chart pattern may only mean the market is correcting due to profit-taking. A trade though $2.804 will change the main trend to down.

The trend will likely change to down if there is a shift in the weather forecast. As of Friday, the forecasts were calling for steadily rising temperatures into the end of the month.

Natgasweather.com is saying that until May 24, “demand will be low to locally moderate.”

Forecast

Traders are likely to continue to battle over the whether weekly injections will be enough to fill the current supply gap. This seems to be enough to create a choppy, two-sided trade.

With the market forming a series of higher-tops and higher-bottoms, there is a bias to the upside, but there doesn’t seem to be enough upside momentum at this time to trigger a sustainable breakout. Therefore, we’re likely to continue to see a two-sided trade this week especially if prices get caught between a pair of retracement levels at $2.841 to $2.800.

If the weather forecasts remain the same then look for a rangebound trade. If the weather services put more heat into the forecast then look for prices to gradually move higher. Cooler temperatures will be bearish for prices.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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