Continues to Show Weakness with a Gap

Looking at the market, it is apparent that natural gas is currently in a trading range, with the $2.00 level offering significant support and the $3.00 level providing resistance. 

• Natural gas markets fell again during the trading session on Wednesday as negative sentiment continues to drive prices down.
• The recent surge in natural gas prices was largely driven by fears arising from the Russian/Ukrainian war, which had cut off gas supplies to Germany through the Nordstream II pipeline.
• This created serious concerns about the ability of the European Union to heat homes during the winter.

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However, since then, the Freeport LNG terminal in Texas has been repaired, allowing the United States to export massive amounts of natural gas. Additionally, the northern hemisphere is heading into a warmer time of year, typically a cyclically weak period for natural gas anyway. Furthermore, the global economy seems to be slowing down, which should reduce the demand for natural gas as a major electrical power source.

Looking at the market, it is apparent that natural gas is currently in a trading range, with the $2.00 level offering significant support and the $3.00 level providing resistance. The 50-Day EMA is also sitting just above and is driving lower, further putting downward pressure on natural gas. While natural gas is unlikely to collapse from here, it is much easier to sell the contract than to buy it at this point.

However, there will come a time when traders start buying natural gas as they see value in the market. As the focus shifts towards cooler temperatures, the market may experience the occasional heat wave during the summer for the northern hemisphere, which could increase natural gas prices. Until the end of the summer, any spikes in natural gas prices should be considered selling opportunities.

Even if natural gas prices break down below the $2.00 level, the downside is probably limited, with the $1.80 level also providing an area where support can be expected. Therefore, investors should remain cautious and keep an eye on the market to take advantage of any potential buying opportunities.

TLDR; the natural gas market has fallen again during the trading session on Wednesday due to the negative sentiment in the market. The surge in natural gas prices was driven by fears related to the Russian/Ukrainian war, but since then, repairs have been made to the Freeport LNG terminal, and the global economy seems to be slowing down. The market is currently in a trading range, with the $2.00 level offering support and the $3.00 level providing resistance. Traders may start buying natural gas soon as they see value in the market. Even if natural gas prices break down below the $2.00 level, the downside is limited, with the $1.80 level providing support. Therefore, investors should remain cautious and wait for buying opportunities to arise.

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