Natural Gas Price Outlook – Natural Gas Drops from Crucial Fib Level

Natural Gas Technical Analysis

The natural gas market has fallen a bit during the trading session here on Monday after initially trying to rally. At this point in time, it looks a lot like a market that is going to use the 50 day EMA as potential support. If we break down below there, the $3.50 level is now a support level and a target for short sellers. If we break down below there, then we go look into the 200 day EMA closer to the $3.30 level.

On the other hand, if we do rally, if we can break above the $3.85 level, it opens up the possibility of a move to the $4 level. Everything being equal, it looks like the 50 % Fibonacci retracement level is offering a bit of a barrier for those trying to go long again. And I think quite frankly, despite the fact that Europeans are buying liquefied natural gas from the US, the reality is that there is a serious lack of demand due to heating concerns in the United States and Europe, there just won’t be as much demand from that venue. And of course, if we do in fact see a slowdown globally, that will work against natural gas as well.

Interestingly enough, though, the Chinese and the Americans do look like they are at least somewhat closer to a trade deal. So we’ll see how that affects things. But I think ultimately, we’ve got a situation where we’ve rallied enough to start thinking about shorting again.

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