Natural Gas prices continued to decline in November, influenced by the anticipation of a ceasefire in Gaza. Despite a one-day delay in the Gaza ceasefire, markets remained optimistic. In a worst-case scenario, Natural Gas prices were projected to drop to the near-term support level.
On the other hand, the US Dollar reversed its gains from Wednesday, trading in the red for the week. With the US market closed on Thursday for Thanksgiving, little counterweight has come, potentially causing a further weakening of the US dollar.
Natural Gas (NG) Has No Supply Issues
The market dynamics indicated no immediate supply issues, with Egyptian gas flows returning to pre-war levels. Moreover, Europe is projected to end the cold season with reserves around 45% full, while Malaysian energy group Petronas is experiencing delays in LNG shipments. Reports also highlighted that LNG flows from Norway to Europe and the UK were above the five-day average, providing a positive outlook to NG bulls.
Gas storage remained historically high despite temperatures nearing 0°C in parts of Europe. However, there was a surge in demand for LNG storage on water, attributed to European underground storage sites reaching capacity. These developments reflected a complex outlook for NGI, combining geopolitical uncertainties, weather conditions, and supply demand.
Natural Gas (NG) Technical Analysis
In the daily Natural gas (NG) chart, a bullish trend continuation is potent from the golden cross continuation. The dynamic 50-day EMA crossed over the 200-day Simple Moving Average level, considered a strong bullish signal for any instrument.
In the most recent price, a downside correction is active where the current price trades sideways within the falling wedge. In that case, a minor upside pressure above the channel resistance could be the first sign of a long possibility.
Investors should monitor how the price reacts at the wedge resistance, where a bullish D1 candle above the 3.123 resistance level could be a conservative long opportunity. However, a deeper correction and a bullish rejection from the 2.736 level could be another long opportunity from the discounted price.
However, a bearish pressure below the 2.700 psychological level could eliminate the bullish possibility and lower the price towards the 2.000 area.