Natural Gas Price Technical Outlook: Best Week Since mid-June, Where to?

Natural Gas, Daily and 4-Hour Chart, Moving Average – Technical Update:

• Natural gas prices climbed the most since middle of June
• Even so, the broader technical picture remains neutral
• 4-hour charts shows that the short-term bias seems bullish

Daily Chart – Range-Bound

Last week, natural gas prices rallied about 6.9% in what was the best 5-day period since the middle of June. Yet, despite this performance, you can barely notice a change in meaningful trend on the daily chart below. The heating commodity remains broadly range-bound ever since prices stabilized around November.

While natural gas eventually broke above the falling trendline from August, meaningful upside progress has been lacking. Broadly speaking, the heating commodity remains stuck in a broad range between 1.967 and 3.027. Until a breakout is seen in either direction, the technical outlook remains mostly neutral.

Chart Created Using TradingView

4-Hour Chart – Eyes on 20-Day SMA

The 4-hour chart can give us a better idea of what might be in store in the near term while the broader picture remains neutral. Last week’s rally established new resistance as the minor 14.6% Fibonacci retracement level at 2.77. Immediate support seems to be the 23.6% point at 2.703.

Meanwhile, the 20-period Simple Moving Average (SMA) is cautiously creeping higher. This could reinstate a near-term upside technical bias in the week ahead. That would place the focus on the June 28th high of 2.878.

Otherwise, falling under the moving average subsequently exposes a rising range of support from the beginning of June. That is maintaining the near-term upside bias in the short-to-medium term. A breakout through this zone would open the door to a bearish perspective toward the June low of 2.136.

Chart Created Using TradingView

— Written by Daniel Dubrovsky, Senior Strategist for DailyFX.com

To contact Daniel, follow him on Twitter:@ddubrovskyFX