Natural Gas Price Fundamental Daily Forecast – Weak as Traders Bet on Quick Rebuild of Low US Stockpiles

Natural gas futures are trading at a seven-week low late Friday on forecasts calling for lower demand the week-ending June 10 and June 17, and expectations the extended shutdown of the Freeport liquefied natural gas (LNG) export plant in Texas would allow utilities to quickly rebuild low U.S. gas stockpiles.

At 19:16 GMT, August natural gas futures are trading $6.960, down $0.478 or -6.01%. The United States Natural Gas Fund ETF (UNG) is at $23.66, down $1.61 or -6.37%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trade through $7.010 signaled a resumption of the downtrend. A move through $9.645 will change the main trend to up.

The minor trend is also down. A trade through $7.981 will change the minor trend to up. This will shift momentum to the upside.

The short-term range is $6.507 to $9.645. The market is currently trading on the weak side of its retracement zone at $7.706 to $8.076, making it resistance.

The main range is $3.528 to $9.645. Its retracement zone at $6.587 to $5.865 is the primary downside target and potential support.

Daily Swing Chart Technical Forecast

Trader reaction to $7.438 is likely to determine the direction of the August natural gas market into the close on Friday.

Bearish Scenario

A sustained move under $7.438 will indicate the presence of sellers. Taking out the intraday low at $6.621 will indicate the selling pressure is getting stronger. If this creates enough downside momentum then look for the selling to possibly extend into the long-term 50% level at $6.587, followed by the main bottom at $6.507.

Bullish Scenario

A sustained move over $7.438 will signal the presence of buyers. If this creates enough upside momentum then look for a labored rally into the short-term Fibonacci level at $7.706, followed by the minor top at $7.981 and the short-term 50% level at $8.076.

Side Notes

Due to the prolonged move down in terms of price and time, a close over $7.438 will form a potentially bullish closing price reversal bottom. If confirmed, this could lead to a 2 to 3-day counter-trend rally.