On Oct. 6, natural gas bulls attempted to keep the price above the recent peak formed on Sept. 8, 2021, but failed. The price fell after testing a seven-year peak at $6.526.
Undoubtedly, this steep slide could be the start of a steep decline in natural gas prices.
The current high levels of inflation, fed by increasing energy costs, will force central banks to tighten monetary policy which may choke the post-pandemic recovery and increase bearish pressure on natural gas futures.
Natural gas futures had already shown signs of exhaustion during the opening session of Oct. 6, 2021, while facing stiff resistance at $6.448 before the final attempt by bulls to test this new peak at 05:00 A.M.
But, the final action started at 07:00 A.M. when the big bears came into action. At 10:30 A.M., natural gas bulls were busy defending their last hideout at $5.848.
Suppose natural gas futures make a sustainable move significantly below $5.526. That would confirm a steep slide which may continue until this week's close, as sentiment could favor the bears with the upcoming weekly inventory announcement on Oct. 7, 2021.
The announcement of a three-digit injection of weekly inventories could drag down natural gas futures to test the $4.763 level during the coming week.
Volatility could continue. Rallies could see selling sprees on every upward move. The $5.938 and $5.537 levels could prove to be a decisive zone during this week and natural gas could revolve around this zone before taking further directional indications.
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