Natural Gas Price Outlook – Natural Gas Continues to See Noisy Trading on Tuesday

Natural Gas Technical Analysis

The natural gas markets plunged towards the 200 day EMA during the early hours on Tuesday but have found enough support in that area to turn around and attempt to break above the previous uptrend line. If we can break above there, then the $3.50 level could be targeted, followed by the 50-day EMA near the $3.59 region. This is a market that typically at this time of year will struggle to find a lot of buying pressure due to the fact that heating demand is all but non-existent in the Northern Hemisphere.

And then of course, unless it’s really hot, people aren’t running air conditioning. So, with that being the case and the fact that the heat wave is basically over in the United States, it has seen the natural gas markets fall hard. If we break down below the 200 day EMA, then we could drop to the $3 level. Nonetheless, even if we do rally from here, and it looks like we’re at least trying to, I’d be all about trying to short this market at the first signs of exhaustion.

And I do think that eventually we do find the $3 level in the natural gas market. Keep in mind that there are some external factors that could cause a little bit of elevated pricing in natural gas, not the least of which would be the fact that the European Union no longer has Russian supply. So, if something happens about that, we could see a major move in this market as well. Remember, this is a U.S. contract you are trading, but exports are starting to pick up in America, so that has softened some of the seasonal negativity here. Again, though, I’m looking to fade signs of exhaustion after short-term rallies.

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