Natural Gas Price Outlook – Natural Gas Continues to Struggle

Natural Gas Technical Analysis

The natural gas markets have fallen a bit during pre-market trading as we continue to test the crucial $3 level. That being said, I think there is a significant amount of support near the $3 level that extends down to the $2.80 level. And I think you have to look at this as a situation where we are just testing to see if we can break through. If we can, then we have a scenario where we could drop down to $2.50.

A short term rally at this point in time is possible, with the $3.20 level offering resistance, followed by the 200 day EMA, the previous uptrend line and the 50 day EMA, which is getting ready to cross below the 200 day EMA kicking off the so-called death cross. So, I still think you have a situation where the market is going to continue to be, I think sell on the rally, and I just don’t have an interest right now in trying to buy natural gas this time of year as we continue to see a lack of heating demand away upon the price.

And with that, I think you also have to keep in mind that the markets are a little bit concerned about the idea of the overall global economy slowing down. So that might drive down demand as well. So, in general, I like shorting, but I like to see short-term rallies that show signs of exhaustion that I can take advantage of.

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