Natural Gas Price Fundamental Daily Forecast – Weather Supportive, but Needs to Hold $2.129 to $2.109

The weather forecasts could be supportive for prices over the near-term and with prices so low and traders heavily short, it’s not going to take much to trigger a strong short-covering rally.
James Hyerczyk
Natural Gas

Natural gas prices are trading lower on Wednesday after reversing earlier gains following a test of a short-term technical retracement zone. Despite the early rally, the trend is down and traders still aren’t sure if a support base is building, or if the recent strength is only a set-up for renewed selling pressure.

At 13:22 GMT, October natural gas futures are trading $2.157, down $0.002 or -0.06%.

Natural Gas Intelligence said earlier today that “Hotter overnight trends in the latest European data helped boost natural gas futures several cents higher early Wednesday.”

Bespoke Weather Services also indicated the latest European guidance heading into Wednesday’s trading trended hotter compared to 24 hours earlier, diverging from the American guidance, which trended cooler.

“We view the changes as mostly noise, with the overall theme remaining the same, which is a hot-biased pattern for the foreseeable future,” Bespoke said. “We could see a dip down close to normal in the back of the 11-15 day, but we still believe the pattern will generally run hotter than normal on into September as well. What does change is the regional breakdown, as the focus now starts to shift from anomalous heat in the South to stronger heat into the Midwest and East, even back into the West.”

Short-Term Weather Outlook

According to NatGasWeather for August 14 to August 20, “Strong high pressure will dominate the southern US with highs of 90s to 100s, hottest over the Southwest & Texas for strong demand. Weather systems with cooling will sweep across the Midwest and Northeast through the weekend with highs of 70s and 80s for only light to moderate demand. However, hotter temperatures will spread across the northern US next week with highs of upper 80s to lower 90s gaining in coverage. Overall, demand will be moderate-low across the northern US and high across the southern US.”

Daily October Natural Gas

Daily Forecast

The weather forecasts could be supportive for prices over the near-term and with prices so low and traders heavily short, it’s not going to take much to trigger a strong short-covering rally.

The main trend is down. The trend will actually change to up on a move through $2.338, while a move through $2.045 will signal a resumption of the downtrend.

The short-term range is $2.338 to $2.045. Its 50% to 61.8% retracement zone at $2.191 to $2.226 stopped the rally earlier in the session. Overcoming this area later today will be a sign of strength.

The minor range is $2.045 to $2.213. The key for the bulls today is whether buyers come in on a pullback into $2.129 to $2.109. A test of this area could bring in aggressive counter-trend buyers.

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
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.
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.