Natural gas markets have gapped higher to kick off the trading session on Wednesday, reaching all the way to the $1.93 level. Having said that, the market looks as if it is trying to fill the gap near the $2.00 level above. At this point, the market is likely to try to break above there as well, reaching into the previous support level that should now be massive resistance. The resistance extends all the way to the $2.20 level, so that of course would be an area where we should see a lot of selling pressure. Signs of exhaustion near that area, especially considering that it would coincide with the 50 day EMA, would be a nice selling opportunity. One thing is for sure, we are extended to the downside far too much right now, so a bit of a “relief rally” makes quite a bit of sense.
NATGAS Video 23.01.20
If we were to break down below the $1.80 level, then the market probably goes looking towards the $1.75 level underneath. That’s an area that will obviously attract a lot of attention as well, but quite frankly it’s difficult to start selling at these extraordinarily low levels. Having said that, it’s not an area where you should be buying either, because quite frankly it wouldn’t take much to spook the market into selling off any rally. At this point, natural gas is a complete disaster, and will remain so going forward, despite the fact that temperatures have plummeted in America.
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This article was originally posted on FX Empire
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