In the course of Wednesday’s trading day, natural gas markets fluctuated back and forth as gravity continued to creep into the picture. Despite this, the market continues to take into account a huge number of variables, not the least of which is the possibility that a severe recession is about to begin. From an industrial perspective, the demand for natural gas will likely decline if that turns out to be the case.
We have also witnessed the end of the heat wave in the United States, which naturally also has some impact on this market. Keep in mind that the Henry Hub contract effectively represents the United States, so whatever is happening there has just a little impact. Because of this, I believe the market will continue to see significant levels of volatility. However, it should be remembered that natural gas prices are now quite high, so if things return to normal in any way, prices will decrease.
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We must be aware of the $7.39 level since that is where the 50 Day EMA is located. If we cross the 50 Day EMA, it’s probable that market memory will start to play a role in the market. Because I believe it is feasible that we reach the bottom of the general consolidation range, which is all the way down to the $5.50 level, in this context, I like the notion of fading short-term rallies.
