Analysing natural gas futures over the first two trading sessions of the week it seems that prices could turn more volatile for the rest of the week as bulls and bears have their reasons to remain active.
Despite a bumpy move on Monday, there seems to be some exhaustion as bulls are worried about being trapped above $7.552 despite a supportive weather outlook and supply squeeze.
Although Russian gas flows via the Nord Stream 1 pipeline look to be restarting on time after the completion of scheduled maintenance. The combination of beaten down open interest and low trade volume will often encourage wild price swings.
Technically speaking, in the weekly chart, futures have formed an exhaustive candle after facing stiff resistance above $7.5, which looks evident enough to get confirmation if the price can not defend the immediate support at $6.853 during this week.
In the daily chart, futures are trading below the lower end of the ‘Ichimoku Clouds’ as the formation of a bearish crossover is about to complete shortly if the price is not able to defend the immediate support at the 9 DMA which is currently at $6.782 in today’s trading session.
In the hourly chart, futures have entered inside the ‘Ichimoku Clouds’ after the formation of the bearish crossover on Tuesday. If the price finds a breakdown below the lower end of the ‘Ichimoku Clriouds’ in today’s trading session it could start selling sprees until the end of this week.
Disclaimer: The author of this analysis does not have any position in Natural Gas futures. Readers are advised to take any position at their own risk; as Natural Gas is one of the most liquid commodities of the world.