The natural gas markets have rallied a bit during the trading session on Thursday, reaching towards the $2.20 level. We have pulled back from there slightly, and quite frankly I think at this point we need to find some type of value as we have rallied quite significantly. At this point in time, the 200 day EMA is sitting at the $2.00 level, an area that of course attracts a lot of attention. I would love to see a pullback towards that area in order to find a bit of value, because I do believe that natural gas is getting ready to make a bigger move. After all, there was a storm that might have been the headline out there to drive natural gas higher, but this rallied before any of that trouble had occurred.
NATGAS Video 14.08.20
My thesis is that the natural gas markets are simply showing inflation, like almost all other commodities are currently. After all, if the US dollar continues to fall in strength, it would make sense that it is going to take more of those very same US dollars to buy natural gas. The hammer that formed during the trading session on Wednesday was a good sign of support, and I think that short-term traders can probably go back and forth but overall, I prefer to ride the natural gas markets higher as we get into colder temperatures. We are already trading the September contract, but I do think that it is only a matter of time before we start to see prices rise due to the bankruptcies, higher demand, and perhaps even most important at the moment, currency devaluation.
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This article was originally posted on FX Empire
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