Natural gas prices have taken a dip at the start of the week, with a noticeable drop during Monday's trading session. The United States and Canada both observe a bank holiday today, which has led to thinner liquidity in the market. Since a significant portion of natural gas trading occurs in North America, this holiday could impact trading activity.
On the daily chart, natural gas futures (NG1!) pulled back to the $3.125 level, near the 200-day EMA. The price gapped lower at the start of the session and continued to fall toward this key support level. Despite the volatility, the market remains range-bound between the $3 and $3.30 levels.
As colder temperatures approach, demand for natural gas is expected to rise, potentially boosting prices. However, the current weather patterns in the United States, with cool nights but warm days, may limit the need for heating, which could temper price increases. The market is also preparing for the rollover to the December contract at the end of the month, which historically performs well.
A pullback toward the $3 level could present a significant trading opportunity due to its psychological importance and historical relevance. Traders should monitor the market closely as liquidity remains thin due to the holiday.