Natural gas prices edge higher amid bullish momentum
Natural gas prices near $3.84 amid bullish momentum
Natural gas futures (NG) continued their bullish trend, trading near $3.84 during Friday's session. The market gains traction following strong support from technical indicators and higher demand expectations due to colder-than-average weather across the Northern Hemisphere.
The bullish momentum builds as prices sustain above critical levels, with traders watching for a breakout.
Natural gas price dynamics (Nov 2024 - Jan 2025) Source: TradingView.
Technical Analysis and Key Levels
The 4-hour chart indicates a bullish structure with higher highs and lows. A recent breakout above descending trendlines highlights potential further gains. Immediate resistance is at $4.20, while critical support levels are identified at $3.70 and $3.43. The 20 EMA remains above the 50, 100, and 200 EMAs, reinforcing short-term bullish momentum.
Indicators like the RSI, nearing 66, signal a potential pullback as the market approaches overbought conditions. Meanwhile, the MACD shows a bullish crossover, suggesting a continuation of positive momentum.
On the short-term chart, the market consolidates after sharp upward movements, forming a potential bull flag pattern. Immediate resistance is seen at $3.85, with support holding at $3.77. A narrowing Bollinger Band signals a possible breakout.
Broader Trend and Market Sentiment
The daily chart confirms a long-term symmetrical triangle breakout, targeting an upside resistance at $4.50. However, failure to hold above $3.63 could lead to a pullback toward $3.41. Indicators like the MACD and RSI further support a bullish bias, with room for additional gains.
Global weather conditions and inventory reports remain critical drivers of price dynamics. Additionally, higher heating fuel demand amid ongoing colder weather strengthens market sentiment, providing a favorable backdrop for natural gas prices.
Natural gas prices are poised for further gains if they break and sustain above $3.87. However, failure to maintain momentum could result in a consolidation phase. As discussed previously, the pivot at $3.63 remains a key marker for bullish continuation, aligning with broader market fundamentals.
In our previous analysis, we highlighted crude oil's price resilience amid supply cuts and declining inventories. This pattern of tight supply continues to play a crucial role in shaping market dynamics for both oil and natural gas.
