Natural Gas Price Forecast – July 1, 2020

Tag: Technical Analysis

Natural Gas Price Forecast

After prompt month natural gas prices fell to a 25 year low of $1.432 late last week prices quickly bounced to challenge important resistance at $1.77. A move like this is common after such a significant decline but does not necessarily mean a bottom has been made.

So far, resistance at $1.77 has held on a closing basis. This level is still a factor because it is August’s 21-day moving average and the 50- and 100-day moving average on the continuation chart. Also, today’s bearish engulfing line and the intra-day waves down from $1.784 call for a deeper test of support. Tomorrow, look for a test of $1.62, a close below which will call for $1.55 and possibly $1.51.

Natural Gas – Daily Chart

Nevertheless, should $1.62 hold and prices settle above $1.77, there is a good chance that a bottom has been made and that prices are settling back into a trading range for the interim. In this case, natural gas should rise toward major resistance at $1.87. For now, unless there is a bullish shift in supply/demand factors, $1.87 is expected to hold.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

WTI Crude Oil Price Forecast

The outlook for WTI crude oil is bullish and the recent correction down from $41.63 looks as though it will be short-lived. However, there are still a few negative technical factors that suggest a deeper correction might take place before WTI overcomes $41.2.

The wave formation up from $37.08 challenged its $39.8 equal to (1.00) target and the 62 percent retracement of the decline from $41.63. The next targets for this wave are $40.6 and $41.2, the intermediate (1.382) and larger than (1.618) targets, respectively. The $41.2 target is most important because it is in line with the continuation chart’s March 9 gap down from $41.05. Closing above $41.2 will open the way for $42.4 where the August contract’s gap down from $42.17 will be filled.

WTI Crude Oil – $0.65 Kase Bar Chart

Because resistance around $40.0 has held on a closing basis there is still a modest chance for a deeper test of support first. Closing below $38.9 will complete today’s hanging man and a close below $38.1 will confirm the pattern. Support at $38.1 is crucial because it is also the 62 percent retracement of the move up from $37.08. Settling below this will call for $37.3, the smaller than (0.618) target of the wave down from $41.63, which then connects to $35.5 as the equal to target. Such a move would reflect a bearish shift in external factors and near-term sentiment.

Brent Crude Oil Price Forecast

Brent crude oil’s recent move up from $39.7 is poised to challenge at least $42.2. This is the equal to (1.00) target of the primary wave up from $39.7 and the 62 percent retracement of the decline from $43.97. For the corrective move down to extend during the next few days $42.2 must hold. Closing above $42.2, which has better than even odds, will clear the way for $42.9 and likely $43.4.

As the move up extends, support at $40.5 is expected to hold. Falling below this would imply that the corrective move down from $43.97 may be positioning itself to extend. Closing below $39.5 will confirm that a deeper test of support is underway and would clear the way for $38.1 and possibly $37.5 before the move up continues.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

Gold Price Forecast

Since mid-April, gold futures have traded in a sideways range that formed a rectangle pattern between nominally $1670 and $1790. The upper threshold of the pattern was briefly overcome on Wednesday, but $1790 held on a closing basis. Even so, odds favor a break higher out of the pattern. A close above $1790 will call for $1820 and eventually a move to the rectangle’s $1910 target ($1789 + ($1789 – $1668.4) = $1909.6).

Gold – Daily Rectangle

Nevertheless, the $1790 threshold is also a confluent projection for the waves up from $1668.4 and $1671.7. Therefore, a test of $1750 support might take place first. Closing below $1750 will call for key near-term support at $1723. Any move down will likely be corrective and should result in a short fall (a failed test of the rectangle’s bottom). Even so, should gold close below $1723 look for another oscillation within the rectangle before a breakout of the pattern occurs.

This is a brief analysis for the next day or so. Our weekly Metals Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key COMEX precious metals futures contracts and LME Non-Ferrous (Base) metals, spot gold, the gold/silver ration, and gold ETFs. If you are interested in learning more, please sign up for a complimentary four-week trial

Natural Gas Price Forecast

Today, the focus of the natural gas analysis is switched to the August contract due to July’s expiration on Friday, June 26.

On a side note, July’s close below $1.60 today puts the prompt month in position to reach at least $1.54 and possibly $1.49 before expiration. However, given the time constraint, reaching $1.49 will be a challenge. Therefore, it looks like the continuation chart’s $1.519 swing low may continue to hold for now.

The August natural gas contract fell to a new contract low of $1.652 today and continues to extend its long-term downtrend. There is some support around $1.65 for a few of the recent waves down from $1.96 and $1.915. However, based on the larger waves and sub-waves, August natural gas is poised to challenge $1.60. This has been strong support for the past several weeks on the continuation chart and should be stiff support for August. The $1.60 target is highly confluent and is the equal to (1.00) target of the primary wave down from $2.447.

Natural Gas – Daily Chart

Once the $1.60 objective is met, another test of resistance is anticipated before the decline continues. Nevertheless, closing below $1.60 will call for $1.55 and likely $1.51, where the continuation chart’s $1.519 swing low will be challenged.

A few daily momentum oscillators are oversold and setup for bullish divergence. Otherwise, there are no confirmed bullish patterns or signals that indicate the move down will stall. Even so, should August rally early tomorrow, look for initial resistance at $1.70 and key near-term resistance at $1.74. Settling above $1.74 will shift near-term odds in favor of a larger correction to test $1.82. This is the 21 percent retracement of the decline from $2.447 and the 21-day moving average.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

WTI Crude Oil Price Forecast

The long-term outlook for WTI crude oil is bullish. However, the move up stalled at $41.63 today. This was in line with the August contract’s 62 percent retracement of the decline from $54.71. Today’s move up also filled the March 9 gap down from $41.05 on the continuation chart, a level that held on a closing basis. Today’s candlestick body is a bit too big to form a shooting star, but the long upper shadow reflects weakness headed into tomorrow. Therefore, a deeper test of support is expected during the next day or so.

WTI’s primary wave formation down from $41.63 calls for at least $39.6. This is the larger than (1.618) target and a likely temporary stalling point. Nevertheless, falling below $39.6 will call for $39.0, the 38 percent retracement of the move up from $34.66 and Monday’s open. For the move up to continue during the next few days $39.0 must hold. Closing below this will call for $38.2 and likely $37.3. The latter is the 62 percent retracement from $34.66 and August’s 21 percent retracement of the move up from $20.28.

WTI Crude Oil – $0.65 Kase Bar Chart

Should WTI turn higher early tomorrow look for resistance at $41.0 to hold. Overcoming this will call for a move above the $41.3 intra-day swing high, which would invalidate the wave down from $41.63 that calls for $39.6 and lower. Key resistance is $42.2. This is a highly confluent wave projection, and more importantly, the top of the August contract’s March 9 gap down from $42.17.

Brent Crude Oil Price Forecast

Brent crude oil stalled just above the $43.9 target called for in yesterday’s update. The subsequent move down is most likely corrective but should extend to at least $41.7 and likely $41.1 before the move up continues. Closing below $41.1 will clear the way for another attempt at $40.0. For now, $40.0 is expected to hold. Even so, settling below this will shift odds in favor of a more significant test of support before the next leg of the long-term bullish trend unfolds.

As the downward correction extends tomorrow, resistance at $43.3 is expected to hold. Closing above this will call for $44.7, which then connects to $45.6 and higher.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

Gold Price Forecast

Gold futures are trading within the boundaries of a rectangle pattern. This is bullish for the long-term. A close above $1790 will confirm a break higher, clearing the way for the next major targets at $1816 and higher.

Gold – Daily Rectangle

However, for the past few days gold has struggled to overcome resistance around $1744. This is the 62 percent retracement of the decline from $1789.0 and the smaller than (0.618) target of the primary wave up from $1671.7. Odds still favor a continued rise and a close above $1749 will call for $1761, which then connects to $1790.

That said, today’s failure to close above $1744 suggests a deeper test of support might take place first. Support at $1703, the 62 percent retracement of the move up from $1671.7, is expected to hold. Falling below this would call for $1685 and then $1666, the lower of which is in line with the bottom of the rectangle. Settling below $1666 would confirm a break lower out of the pattern and a strong bearish shift in sentiment.

This is a brief analysis for the next day or so. Our weekly Metals Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key COMEX precious metals futures contracts and LME Non-Ferrous (Base) metals, spot gold, the gold/silver ration, and gold ETFs. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural Gas Price Forecast

The outlook for natural gas is bearish after settling below $1.69 and wiping out the bullish hammer that formed a week ago on June 10. The move down also broke the lower trend line on the continuation chart connecting the $1.519 and $1.595 swing lows. Today’s pullback tested and held this same trend line and Tuesday’s midpoint, which is bearish for the near-term. Finally, the move up from $1.597 forms a bearish flag that is poised to break lower.

Natural Gas – Daily Chart

A close below $1.60 is expected during the next day or so and will open the way for $1.54 and likely $1.49. Once $1.49 is met, another significant test of resistance is anticipated.

Nevertheless, $1.60 is a historically important level and has been resilient support after prompt month prices on the continuation chart fell to $1.519 on March 23. So far, $1.60 hast held on a closing basis. Should the corrective move up from $1.597 extend above $1.67 first, look for a test of $1.71. Resistance at $1.71 is expected to hold, though a close above this will call for $1.78. This is key resistance because settling above $1.78 will open the way for a move to, and likely above, $1.83. For now, such a move is doubtful without a strong bullish shift in external factors (e.g. weather or other demand).

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

WTI Crude Oil Price Forecast

The long-term outlook for WTI crude oil is bullish. The move up is poised to eventually reach $41.8 where it will attempt to fill the July contract’s March 7 gap down from $41.88. However, WTI has desperately been due for a significant correction. Based on this afternoon’s price action, there is still a good chance for a larger test of support during the next couple of days.

WTI Crude Oil – $0.65 Kase Bar Chart

There is little doubt that the move down from $40.44 is corrective. Today’s close above the 62 percent retracement of the decline to $34.36 is positive for the near-term outlook. Even so, today’s move up stalled just below the $39.1 target as called for in yesterday’s update. Also, the wave formation down from $39.06 calls for a test of $37.3 and likely $36.3 before a new high is made. Falling below $36.3 will call for $35.3, the smaller than (0.618) target of the primary wave down from $40.44. A close below $35.3 would call for $33.0 and possibly lower.

Should WTI overcome $39.2, look for a test of what has become key near-term resistance at $40.1. Settling above this will shift near-term odds in favor of making the push to $41.8 sooner rather than later.

Brent Crude Oil Price Forecast

Brent crude oil settled above the 62 percent retracement of the decline from $43.33. This strongly suggests that the recent move down is corrective and that a new high will likely be made soon. However, today’s move up stalled just above the larger than (1.618) target of the primary wave up from $37.01. Therefore, a test of $40.0, likely $39.3, and possibly $38.6 is expected before a new high is made. Settling below $38.6 will call for key support at $37.6, a close below which would call for a much more substantial downward correction before the move up ultimately continues.

For tomorrow, resistance at $41.7 is expected to hold and $42.6 is key. Settling above $42.6 will open the way for $43.5 and higher.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

Gold Price Forecast

Gold is trading in a range between nominally $1670 and $1790. This is bullish for the long-term outlook as the range forms a rectangle top, a pattern that breaks higher around 63 percent of the time. The pattern also reflects the significance of $1665 support and $1790 resistance and sets gold up for a breakout trade in either direction. Both $1665 and $1790 are highly confluent wave projections, and in the case of $1665, retracements, too.

Gold – $10 Kase Bar Chart

The move above $1744, the smaller than (0.618) target of the wave up from $1668.4 and the 62 percent retracement of the decline from $1787.5, during the last few days was positive and suggests gold should challenge $1790 again soon. This is the equal to (1.00) target of the wave up from $1668.4. Closing above $1790 will confirm a break higher out of the rectangle pattern, clearing the way for $1815 and higher.

Nevertheless, the recent move up looks a bit overextended on the intra-day charts and has not been able to close above $1744. Therefore, a test of $1723 and possibly $1698 will likely take place first. Support at $1698 is expected to hold. Closing the week below this will call for $1665, which is in line with the bottom of the rectangle. Closing below $1665 would confirm a break lower out of the pattern and clear the way for a much more substantial move down.

This is a brief analysis for the next day or so. Our weekly Metals Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key COMEX precious metals futures contracts and LME Non-Ferrous (Base) metals, spot gold, the gold/silver ration, and gold ETFs. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural gas fell as called for and finally challenged the crucial $1.69 objective. However, the move down stalled just below $1.69 at $1.674 and then quickly rallied. This formed a spike type bottom on the intra-day chart and a textbook daily hammer. The brevity of the move down felt as though the market needed to get a test of $1.69 out of its system before rising to challenge resistance again.

Natural Gas – Daily Chart

Today’s prices action, the hammer, and several momentum oscillator divergence setups call for a larger test of resistance during the next few days. Closing above $1.81 will confirm the hammer and clear the way for key near-term resistance at $1.86. Resistance between $1.86 and $1.90 has been resilient on the July and continuation charts for the past few weeks. Therefore, closing above $1.86 would confirm a bullish shift in near-term sentiment and increase odds for a test of $1.94 and $2.00.

Nonetheless, for now, the move up is corrective and must hold $1.69 on a closing basis. Should natural gas fall below $1.75 early tomorrow look for another attempt at $1.69. Settling below $1.69 would be quite bearish and open the way for $1.61 and possibly lower.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.