Natural Gas markets show signs of support during the week
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Natural gas markets continue to stay in a reasonably tight range as we have seen the $2.70 level offer a bit of resistance, but I also see the $2.60 as support. If we can break above the $2.70 level, the market will probably go looking towards the $2.80 level above, which is resistance. I believe there’s even more resistance at the $3.00 level, and I would be very happy to start selling in that general vicinity. Market participants continue to look for rallies to short, because the oversupply of natural gas is a major part of this market. The $3.50 level is the most recent high from the last couple of years, and I think it would take a structural change in the markets to have this change anytime soon. Because of this, I look for exhaustive weekly candles to start shorting longer-term positions with decent size.
If we were to break down below the $2.50 level, I think the market could unravel quite rapidly, and it could be a bit catastrophic. I don’t expect that to happen, but the longer-term trader will more than likely need to see some type of rally to take advantage of getting a bit of room to move. The US dollar rallying could cause a bit of pressure as well, but after the jobs report this past week, not much has seemed to change when it comes to the fundamental set up, as well as the technical set up of the natural gas markets.
NATGAS Video 09.04.18
This article was originally posted on FX Empire