- The natural gas market has pulled back just a bit during the trading session here on Friday, only to turn around and show signs of life.
- The market is hanging around the 50 day EMA, which is an indicator that a lot of people will be paying close attention to.
- The market is going to continue to be very noisy as we are hanging around the markets trying to figure out whether or not we are going to see demand rise or fall.
For example, typically this time of year, you will see demand fall in the United States and Europe due to the temperatures rising. And therefore, the demand in places like Boston, New York, DC don't necessarily reflect higher pricing and therefore traders will typically sell off at this time of year. However, we do have inflationary problems around the world and that could continue to keep the market somewhat elevated.
Inflation Could Be an Issue
Top Regulated Brokers
Certainly, it will keep it more elevated than usual. Furthermore, you should also keep in mind that there are a lot of questions about the European Union and whether or not Russian gas is going to make it there. If it doesn't, then that directly influences this contract due to the fact that the Henry Hub contract with the natural gas CFD that you're trading is based on us natural gas. So, if they are importing it into Europe, then obviously it makes it more expensive. That being said, this is a market that also has to look at storage as we had quite a bit more used during this very cold winter.
But that's a temporary thing. If we can break down below the hammer of the Thursday session, I think we will go to the $3.50 level. If we do rally from here, $4.20 is about where I'm going to be looking to short at the first signs of exhaustion.
Ready to trade daily Forex forecast? Here’s a list of some of the best commodities brokers to check out.