Natural Gas Technical Analysis
Natural gas markets have been relatively quiet early during the trading session on Tuesday, as we continue to look at the $3.00 level underneath offering a buying opportunity for those who are looking to pick up a bit of value. After all, the natural gas markets recently broke out of a major resistance barrier, and now we are just above that breakout point. The $3.00 level of course is an area that a lot of people will be paying attention to, as it is a large, round, psychologically significant figure and of course an area that has been important more than once.
The 50-Day EMA sits underneath the $3.00 level, which of course is going to offer support yet again, and at this point the market looks as if it is going to eventually see a bigger move. The cyclicality of this market should not be forgotten, as we are starting to pay attention to the colder temperatures that are coming, and therefore demand will pick out. Furthermore, the Europeans have to worry about supply, as the major supplier of natural gas, being Russia, obviously is not going to be doing so this year. Furthermore, we’ve seen episodes where the pipeline coming from Scandinavia has been tampered with, and of course the natural gas pipeline coming out of Western Africa is still a huge question. In other words, supply is going to be very difficult to come up with, and all it’s going to take as a couple of cold snaps to send this market bracing to the upside.
If we were to break down below the 50-Day EMA, then it could signify a deeper correction, but at this point it seems to be a bit difficult to imagine that happening. Even if it were to happen, I would only add to my long position as we are at historically low pricing and at this time of the year we almost always see a bump higher. Keeping leverage low is the key here, as it ends up being an investment, not necessarily a short-term trade. Ultimately, this is a market that I think will be volatile, and therefore dialing back on the leverage helps you hang on to the position.
For a look at all of today’s economic events, check out our economic calendar.
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October 17, 2023 at 07:31PM
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Natural Gas Price Forecast – Natural Gas Markets Continue to Test Support - FX Empire
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