Will Natural Gas Break Above $3.50 Soon?
Natural gas steadies around $3.40, supported above key EMAs, but faces resistance at $3.45–$3.50 before extending higher.
FUNDAMENTAL OVERVIEW:
Natural gas trades around $3.40 after breaking above a descending trendline, signalling the emergence of early bullish momentum. The price structure has improved, with the commodity holding above the 200-EMA ($3.21) and 50-EMA ($3.22), though resistance levels at $3.45 and $3.50 remain key hurdles.
On the supply front, US daily production continues to hover near record highs, limiting the strength of the rally, while comfortable storage levels reinforce the likelihood of short-term consolidation. However, aggressive output cuts by Canadian producers, following negative AECO hub prices, are helping offset broader oversupply risks.
Technically, natural gas retains a constructive outlook above its 20-day and 50-day EMAs, which provide strong dynamic support. A decisive close above $3.45 could pave the way toward $3.50 and beyond. Conversely, immediate support lies near $3.20, with further downside risk toward the psychological $3.00 mark if momentum falters.
Overall, natural gas maintains a cautiously bullish tone as long as prices hold above $3.20, with upside potential hinging on a breakout above near-term resistance.
NATURAL GAS TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
Natural Gas is trading within an up channel.
Natural Gas is moving above all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in Buying Zone, while the Stochastic oscillator suggests Positive trend.
Immediate Resistance level: 3.500
Immediate support level: 3.304
HOW TO TRADE NATURAL GAS
Natural gas, after a sharp decline, found support and reversed higher, establishing a bullish structure that pushed prices upward. The commodity recently broke a key resistance zone with a strong bullish candle, signalling strength. At present, prices face rejection from higher levels and are retracing toward the demand zone. If this zone holds, natural gas could resume its upward momentum and extend gains further.