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The natural gas markets going back and forth during the day on Wednesday continues the choppiness that we have seen over the last several sessions, and I think that when we look at this market, I think that if we break down below the $2.68 level, the market will be free to go much lower, perhaps reaching down to the $2.65 level, followed by the $2.60 level which is much more supportive and significant on the longer-term charts. I think that if we were to rally from here, we would need to break above the $2.75 level to reach towards the $2.80 level above, and that of course would be a major ceiling for pricing in this market. I believe that the oversupply of natural gas is a long-term issue, and therefore it’s only a matter of time before the sellers return every time we rally.
I think that although the natural gas markets tend to look at the next couple of weeks for the demand picture, ultimately it’s likely that the $2.80 level will be difficult to break above, but if we did I think that the market will probably have a short-term pop that it will follow to the upside but no higher than the $3.00 level, which has been a major barrier more than once. As we go into the warmer months of the year in North America, it will probably drive demand down even further. We also have a strengthening US dollar, so that of course puts bearish pressure on commodities in general.
NATGAS Video 10.05.18
This article was originally posted on FX Empire