The natural gas markets have initially pulled back during the trading session again on Wednesday again, but continues to find support again at the $1.80 level, forming a bit of a range.
Natural gas markets have shown a bit of resiliency during the trading session on Wednesday, as the $1.80 level continues offer a bit of support. I believe that we are now trying to bounce around in a roughly $0.20 range, with the $2.00 level above should continue to offer plenty of resistance. Ultimately, believe that the market is trying to figure out what to do next, as we are at extraordinarily low levels. However, we are starting to head into the warmer months of the year in both Europe in the United States, and that is not going to do much for confidence when it comes to this market.
If we do break down below the lows, then I think we go looking towards the $1.60 level underneath, which is a historical low. If we can break above the $2.00 level, we would also be breaking above the 50 day EMA which of course is bullish, but I also see a significant amount of resistance near the $2.20 level. Ultimately, I am bearish this market, but I recognize we are more likely to see a bit of a continuation sideways more than anything else. The market participants continue to show quite a bit of back-and-forth, and I think this market is particularly prone to day trading more than anything else, but obviously you should keep a bit of a downward bias on anything you do. Buying this market, although possible, is obviously a very difficult to deal with. I do believe at this point in time that fading rallies is by far the easiest way to trade.
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.