Natural Gas takes step back in thin US holiday trading

• Natural Gas takes a small step back as US markets close due to the Labor Day Holiday.
• The US Dollar weakens slightly after Friday’s knee-jerk reaction on Nonfarm Payrolls data. 
• Support at $2.80 likely to hold before the rally picks up again. 

Natural Gas falls slightly in European trading hours as US markets are closed for Labor Day. Substantial declines aren’t expected as European gas supply is under pressure. Over the weekend, supply from three Norwegian gas fields was halted, sending Norwegian gas exports to the EU  to its lowest level since 2015.

Meanwhile, the US Dollar trades mixed after a US Jobs report that delivered a knee-jerk reaction. The US Dollar Index first weakened on the initial headlines, and reversed an hour later as markets digested the report’s content, which pointed to still strong labour market conditions. With the US on holiday, no big moves are expected in either Natural Gas futures or in the Greenback. 

At the time of writing, Natural Gas is trading at $2.844 per MMBtu.  

Natural Gas news and market movers

• The European Natural Gas price jumped 5.3% due to surprise outages in Norway.  
• The risk of strikes inAustralia remains high, an outcome that could hit Natural Gas supply going forward. 
• Japan’s spot power price climbed 5.5% for the week as bad weather hurts the solar-power supply and puts higher pressure on LNG supplies. Reports of regional costs soaring on LNG supply are being factored into the price as well.
• Further unplanned curbs in Norway are projected due to unforeseen maintenance at the Aasta Hansteen field. The Dvalin field is also impacted, while planned works at Oseberg are being extended due to unforeseen delays. 

Natural Gas Technical Analysis: steady during US holiday

Natural Gas was on a tear last week, together with Crude Oil prices. Though the European bloc has its gas stockpiles filled up over more than 90%, it looks like it will need to scramble for any further needs.. 

On the upside, $3 is the level to watch after the double top formation from Friday and Thursday. Just above there, the 200-day Simple Moving Average (SMA) is present as a cap and has not been tested in the past few months. Keep an eye on $3.03 before targeting $3.18 and testing the upper side of the trend channel. 

On the downside, the trend channel has done a massive job underpinning the price action. Aside from one small false break, ample support was provided near $2.71. The 55-daySMA needs to give that much needed support at $2.71 ahead of the ascending trend channel at $2.63. Any falling knives can still be caught by the 100-day SMA near $2.58.