We expect natural gas to decline correctively during its upcoming trading.

Spot natural gas prices (CFDS ON NATURAL GAS) increased in their recent trading at the intraday levels, to achieve slight daily gains until the moment of writing this report, by 0.89%, to settle at the price of $6.449 per million British thermal units, after it rose during yesterday’s trading by 3.38% .

As the July futures contracts expire on Tuesday, some renewed volatility dominated the market, as traders weighed a bunch of fundamentals, some positive and some negative.

While the weather forecast is relatively positive as demand is high in most parts of the United States, the negative effects will be stronger if the Freeport LNG facility continues to be interrupted after last week’s explosion. LNG exports to Europe will decrease and the rest will go to local stocks and local use.

Meanwhile, production in the US hit a year-to-date high of 97.36 billion cubic feet per day over the weekend, but recent data indicated a decline on Monday.

Technically, the price is trying with its recent rise to compensate for part of what it incurred from previous losses, and at the same time it is trying to dispose of some of its clear oversold by the relative strength indicators. This is especially with the start of positive signals from them. All of this comes in light of the control of the main bullish trend in the medium term along a slope line , as shown in the attached chart for a time period (daily).

The bearish corrective trend dominates in the short term, with the continuation of the negative pressure for its trading below the simple moving average for the previous 50 days, which means doubling the negative pressures on its upcoming trading.

Therefore, we expect natural gas to decline correctively during its upcoming trading, especially in the event of its stability returning below the 6.361 level, to target the support level 5.660.

At this point, it is very likely that we will see a lot of chop, but that is about it.

The US dollar has rallied again on Tuesday as we have tested the 1.28 level against the Loonie. Keep in mind that the market has seen a lot of upward momentum, so the fact that we pulled back rather early in the session should not be a huge surprise. The top of the overall range is at the 1.29 level, which should be a huge barrier to overcome. If we can break above there, then the US dollar will almost certainly test the C$1.30.

That being said, we have been in a consolidation area for a while, so it should not be a huge surprise to think that we will stay in it. The 50-day EMA is trying to turn around and break above the 200-day EMA, and kick off what is known as the “golden cross.” This is a bullish sign but tends to be a bit late. This is especially true when you are trading somewhat sideways in general, when you look at it from the longer-term perspective.

If we break down below the 50-day EMA, then it is likely that the US dollar will drop to C$1.25, but obviously, it would take quite a bit of momentum shift in order to make that happen. The market will continue to be very noisy, but that is nothing new to the USD/CAD pair as the two economies do so much trading with each other. You should also pay close attention to the crude oil markets because the Canadian dollar is quite often used as a proxy for the crude oil market.

At this point, it is very likely that we will see a lot of chop, but that is about it. If we do break out to the upside, a move above the C$1.30 level could open up a huge move higher. I do anticipate that there will be plenty of support for the US dollar on any type of pullback, mainly because there is so much fear out there when it comes to the economic situation. In the current environment, is very difficult to imagine a scenario where we see the greenback give up a lot of real estate, so given enough time I think it will probably continue to be bullish over the longer term.