The natural gas market has shown positive signs in early trading on Friday, despite volatility during Thursday’s session. Much of the current market focus is on the lack of demand for home heating, which typically drives gas prices down. However, the situation is complicated by record exports of liquefied natural gas (LNG) from the United States to Europe, which have disrupted typical market patterns.
A key point of interest for traders is the 50-day Exponential Moving Average (EMA), which many are watching closely. This area, along with other levels marked on the chart, suggests that the market might face some resistance in the near term, with potential for consolidation between the $3.50 and $3.75 range.
Despite the lack of heating demand this season, natural gas prices have not fallen as much as expected. This is partly due to the continued high outflows of LNG from the U.S. to the European Union. While this shift may alter the normal seasonal cycle, it doesn’t necessarily indicate a permanent change in the market.
At this stage, there are no clear shorting opportunities in the market, but traders should remain cautious. If natural gas prices break higher, the $4 level will act as a key barrier. Fibonacci analysis also suggests that the market is hovering around the 38.2% retracement level, adding another layer of complexity.
Overall, while the market appears somewhat bullish in the short term, a bearish sentiment remains, especially if heating demand does not pick up. Traders should watch for signs of market exhaustion before making any significant moves.
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