Due to investors reacting to an unimpressive storage withdrawal and other factors like mixed signals from the latest weather models, the natural gas futures are trading lower on Friday. Early price action was indicating that prices would likely to be headed toward a short-term technical retracement area at $3.089 to $3.014.
This area seems critical to the short-term outlook since the main trend is currently up on the daily chart, with value-seeking buyers stepping in on a test of this zone. But help will be needed from the weather forecasts.
The outlook for short-term weather would be on high pressure dominates most of the southern US with warm highs of the 60s and 70s before colder air arrives on the weekend. Lows will later drop into the 20s and 30s.
Strong weather system would bring heavy rain and snow and most importantly, frigid air which will advance across the Plains and Midwest for a couple of days. Just to go later across the Ohio Valley and East on the weekend with lows that go from -20s to 20s.
The market should set up their set up to test a value zone between $3.089 and $3.014 which could attract buyers on the move; weather models would the have to agree on the return of cold weather. If this isn’t the case, sideways will be expecting to go lower on trade over the short-term.
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