Natural Gas Forex Signal 16/10: Looking To Bounce (Video)

2025-10-17 05:28:55

(MENAFN- Daily Forex) Potential signal:

I would be a buyer, but if we break below $2.88 – it's time to step back and get out.
I am aiming to see $3.30 for a swing trade.

The natural gas market is a market that I get a lot of questions about, and this time of year become much more interesting than most of the rest of the year. For example, market participants saw a massive gap hire a couple of weeks ago as we rolled into the November contract. That makes sense. This is very cyclical asset, mainly due to the fact that most of it is driven by heating demand in the Northeastern part of the United States, Northern Europe, et cetera.

So now that we're in the November contract and halfway to reaching the December contract, it gets very interesting. We have a gap tire at the rollover to the uh November contract pulled back to fill that gap. And now it looks like we are trying to defend the $3 level. It is because of this that I become increasingly interested in dipping my toe in the water.

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Whether or not we really take off to the upside right away remains to be seen. Obviously, a lot of this is driven by the next weather forecast, but if we can break above the 50-day EMA, that opens up the possibility of the 200-day EMA being targeted. Longer term, do think we go higher. And in fact, I fully anticipate seeing natural gas hit $4 sometime in the next couple of months, because sooner or later we'll get a cold snap in places like Boston, Pittsburgh, Columbus, etc. That will drive up demand, and you'll see a day with a huge spike. That's pretty typical in this market. I don't like shorting natural gas in the winter.

Once we're in the winter contracts, I'm either long of the market or I'm not in the market. There's really no shorting whatsoever for me. Now, once we get into warmer contracts, yes, I will short it and hang on to that position for a while. We are getting close to a swing position in natural gas and therefore I'm willing to start to nibble a bit.

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