Natural Gas Price Outlook – Natural Gas Continues to See Selling

Natural Gas Technical Analysis

Natural gas has dropped a bit during the trading session on Wednesday as we continue to see a lot of noisy behavior. It’s also worth noting that the $3.50 level has been blown through and that, of course, it is an event worth paying attention to. We have a trend line that coincides with this breakdown, so the close of the day will be very important. Ultimately, I think you have to look at this through the prism of whether or not the uptrend is over, and I think we are very close to that being true.

After all, temperatures are rising in the United States, and this time of year typically is not a high demand time of year for natural gas. If we can rally from here and break above the $3.60 level, then we probably have another rally that we will then fade closer to the 50-day EMA. If we break down below the 200-day EMA, then I think we drop down to the $3 level. This is of course a major round figure that a lot of people will pay attention to.

In general, this is a market that will continue to be very noisy. And I think you should also keep in mind that some of what we are seeing here is the guesstimate that the European Union will have to import US gas. So that may keep it somewhat elevated, but at the end of the day, the demand is dropping and therefore prices should fall right along with that.

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