Natural Gas Price Outlook – Natural Gas Continues to Consolidation

Natural Gas Technical Analysis

Natural gas markets were quiet, but that’s not a huge surprise, considering that we were dealing with limited hours due to the National Day of Mourning for the death of President Jimmy Carter in America. That being said though, it doesn’t really change the technical analysis as we have been going back and forth near the $3.80 level in the spot market and at this point in time, we continue to see a lot of resistance near the $4 level, which of course is a large round psychologically significant figure. If we pull back from here, the $3.40 level offers support, so I think we’re just going to bang around in this area, trying to sort out where to go next.

Having said that, we do have the non-farm payroll announcement on Friday, and that will have a major influence on what people think the Federal Reserve will do, which in turn has a major influence on what people do with assets, including commodities. Inflation is a problem, and that should continue to translate into more expensive commodities, but we’ll just have to wait and see if that knocks on into this market due to the fact that natural gas is very cyclical under the best of circumstances.

If we do break out to the upside, the $4.50 level would be your next major resistance barrier. If we were to break down from here, as long as we can stay above the 50-day EMA, I have to assume that it’s more likely than not that buyers will return to pick up cheap gas.

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