Natural Gas Price Outlook – Natural Gas Looking to Fall Soon

Natural Gas Technical Analysis

Natural gas has gapped lower to kick off the trading session on Friday, turned around to fill that gap and now it’s at the bottom of the range it’s trying to set up. The $3.50 level, of course, is crucial, and it has been multiple times in the past, but now we are also testing a major uptrend line going back to September. So, I think there are a lot of things going on here because not only do we have the $3.50 level and the uptrend line, but we also have the 200 day EMA sitting underneath. At this point, I think it’s probably only a matter of time before we go down to the $3 level.

Short-term rallies at this point in time I think continue to get sold into with the $3.87 level offering a bit of resistance as the 50-day EMA is hanging around that level. Keep in mind that natural gas is a highly cyclical market and as temperatures start to climb in the United States, demand for natural gas will drop. But adding more to that this year is the fact that there is an expectation of a massive recession in the United States, and therefore there could be a lot less demand for electricity.

While I don’t really buy that as the main reason, it just adds to the pile of reasons why natural gas should be falling during the month of April as it is. We are entering one of the weakest seasons for natural gas, cyclically speaking, so falling from here makes a lot of sense.

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