Natural Gas Price Outlook – Natural Gas Attempts to Bounce from Support

Natural Gas Technical Analysis

The natural gas market has rallied slightly during the early hours on Friday after initially dipping. This is a market that has seen quite a bit of selling pressure over the last couple of days, and I don’t think that happened in a vacuum. If we do rally a bit from here, I’ll be looking for signs of exhaustion to start selling again. The $3 level is right in the middle of all of that in a way, and of course, the large, round, psychologically significant figure will attract a certain amount of attention. Furthermore, we also have the 50-day EMA sitting at the $3.08 level.

So, I think that offers a bit of resistance as well. Ultimately, I’ll be looking for short-term rallies that show long wicks to the upside that I can start shorting, as I think we still have one more drop before the winter scenario higher pricing. There is a gap underneath near the $2.80 level that has not been filled. So perhaps that’s what we do before starting to price in winter contracts. We are trading the October contract right now, which, of course, is a bit cooler than September, but it’s still not exactly high season.

We’re a few weeks away from rolling over into that. That being said, I do think the downside is somewhat limited at this point. Although one thing that could be a bit of a drag on natural gas is the fact that if the US economy does, in fact, slow down, there may be a little less demand for electricity from industry, which quite often is produced via natural gas.

For a look at all of today’s economic events, check out our economic calendar.