Natural Gas Price Outlook – Natural Gas Tests a Major Level

Natural Gas Technical Analysis

The natural gas market has shown itself to be a little bit hesitant to break above the $3 level, which, of course, is a large, round, psychologically significant figure in an area where I would expect to start seeing quite a bit of downward pressure. Now, that being said, natural gas probably still struggles for a little bit, mainly due to the fact that we are heading into the September contract or just jumped over into the September contract. And while that is better for price than August, quite frankly, it’s still not a high demand season.

We’re not there quite yet. And if that’s going to be the case, then I think you’ve got a situation where you still have to look to be fading rallies that show signs of exhaustion. We haven’t really seen that yet, so it’ll be worth paying attention to the daily candlesticks and whether or not they form some type of long wick to the upside.

The 50 day EMA is right at about the $3.10 level, so I think that’s worth watching. And then after that, we have the 200 day EMA at $3.27. If we break above there, then the trend by its very definition is broken to the upside and switched. I don’t see that happening. I’m still looking for signs of exhaustion I can take advantage of. Natural gas has no business skyrocketing. Although in all fairness, we did fall quite a bit. So, it does make a certain amount of sense that we see a relief rally here. I still think fading the rally is the way to go.

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