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The natural gas markets broke down significantly during the trading session on Tuesday, breaking through the $2.90 level, reversing the entire momentum that we had seen recently. It looks as if we were ready to go to the $3.00 level but forecast out of the United States are suggesting that we are going to see milder temperatures going forward. Ultimately, the market should continue to go lower, perhaps reaching to the $2.80 level underneath, which has been important. The up-trending channel on the daily chart continues to attract a lot of attention, so I think there will be massive support closer to the $2.76 level.
I think it’s only a matter time before the buyers will try to pick up a bit of value, but if we slice through the $2.76 level, that could unwind this market rather significantly. We clearly have changed attitude overall, and longer-term I am bearish of natural gas, and quite surprised that we could reach the $3.00 level. If you been reading my forecasts lately, we have enjoyed a nice move higher, and I believe that short-term we could continue to go higher, but obviously the longer-term oversupply of natural gas is going to come in and punish this market yet again. That being the case, selling is going to be easy, especially in signs of exhaustion. We could get a short-term bounce, and that could be a short-term scalper, but I think after today’s action on Tuesday, sellers are in control again.
NATGAS Video 30.05.18
This article was originally posted on FX Empire