LNG Eyes Key Resistance as Momentum Builds

Momentum indicators activated above the $3.46 level suggest rising demand, with natural gas poised to challenge resistance between the weekly peak at $3.61 and the 50-day moving average at $3.81. The commodity extended its upward movement on Thursday, continuing the counter-trend rally that began earlier in the week. A bullish hammer candle on Wednesday coincided with a reclaim of the 20-day moving average, now situated at $3.38. This was followed by a breakout above the week’s previous high of $3.46, triggering a fresh bullish continuation signal. Further technical support came from a breakout on the Relative Strength Index (RSI), signaling renewed upward momentum.

A daily close above $3.46 would validate this bullish signal, while holding above the 20-day moving average would reinforce evidence of improving demand. A weekly bullish reversal this week also points to a higher swing low being established within the broader uptrend, suggesting that buyers remain firmly in control. The prevailing upward trend is defined by a rising parallel channel, and price is now approaching its median line—acting as potential resistance—roughly aligned with the $3.61 weekly high.

Should natural gas surpass this level, the next targets would be the $3.75 Anchored VWAP and the 50-day moving average. A daily close beyond the weekly high would offer further confirmation of strength and raise the likelihood of continued gains.

Despite Thursday’s early rally attempt, the market retreated after testing a key uptrend line that now serves as resistance. The market remains at a critical juncture—balancing bullish technical momentum with seasonal and macroeconomic pressures. Historically, natural gas tends to weaken this time of year as traders anticipate reduced heating demand in the U.S. and Europe. Warmer temperatures are already putting downward pressure on prices.

Additional concerns arise from potential economic slowdown in the United States, which could reduce electricity consumption and, by extension, natural gas demand. While the 200-day EMA offers support just beneath current levels, the confluence of seasonal factors, overhead resistance near $3.50, and weakening fundamentals suggests challenges ahead. As such, fading short-term rallies may remain a favorable strategy. A break below Wednesday’s candlestick low could send prices retreating toward the $3.00 support zone, a level likely to play a critical role in near-term price direction.

Across the Atlantic, UK natural gas futures dipped toward 76 pence per therm—marking a nine-month low—amid subdued demand and rising storage levels across Europe. Milder weather in the UK and North Sea regions has lessened heating needs, a trend expected to continue into next week. A sharp increase in LNG deliveries to Dutch hubs has aided European restocking efforts, alleviating immediate supply fears.

However, European gas storage remains relatively low at 38.41% capacity—well below last year’s level of over 61%—highlighting potential vulnerability. Geopolitical uncertainty adds another layer of complexity, as recent talks between U.S. President Trump and Ukrainian President Zelenskiy, along with Trump's suggestion that Ukraine might concede Crimea for peace, have introduced volatility. This mix of soft fundamentals and geopolitical risk could lend support to prices, particularly given the UK’s limited storage capabilities and its reliance on imports from continental Europe.