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Natural Gas Price Forecast – Natural Gas Markets Attempt Bounce

By:
Christopher Lewis
Updated: Feb 4, 2020, 17:16 UTC

The natural gas market bounced a bit during the trading session on Tuesday, as value hunters came in based upon the extreme low prices that we see in the market. The market does tend to move in $0.20 intervals, so this should not be a huge surprise.

Natural Gas Price Forecast - Natural Gas Markets Attempt Bounce

Natural gas markets have pulled back a bit initially during the trading session on Tuesday, as the test the $1.80 level underneath, which is of course a large, round, psychologically significant figure. The natural gas markets tend to move in $0.20 increments, so this area offering support isn’t a huge surprise. That being said, if we break down below the $1.80 level, then it’s likely that we go towards the $1.60 level which is a major level on longer-term charts.

NATGAS Video 05.02.20

Again, the oversupply of natural gas continues to be a major problem. It looks as if we are trying to get a little bit of short covering or perhaps even value hunting in this area, but it’s likely that there will be plenty of sellers above in order to take advantage of the overall trend. I believe at this point the $2.00 level should be massive resistance and would be a bit surprised if we break above there without some type of major storm in the United States. Currently, prices reflect not only the oversupply, but the lack of cold temperatures for the winter. As long as that’s the case, it’s very unlikely that this market can rally for any significant amount of time. I look at rallies as an opportunity to get short yet again, in a market that has been so determined in one direction for so long. I do think that eventually we get a larger bounce, but that will have more to do with bankruptcies in the United States when it comes to natural gas companies.

Please let us know what you think in the comments below

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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