Natural gas markets have broken down during the trading session on Thursday, reaching down towards the $1.65 level, which is an area that has been important for some time. Ultimately, I think that the market will probably continue to see a lot of noise in general, as we have so many headwinds when it comes to this market. The natural state of things in this market as the selloff due to the fact that we have so much in the way of oversupply. Given enough time, I think that we are probably going to continue to see a lot of noise overall, but I do think that given enough time we should see more of a “sell the rallies” type of situation as the oversupply of natural gas is a known quantity.
NATGAS Video 27.03.20
Furthermore, we also have the temperatures rising in the northern hemisphere that will drive down the demand for natural gas, as it simply won’t be necessary to heat homes anytime soon. Beyond that, the coronavirus continues to slow down overall global growth, and that of course will drive down demand in and of itself. It’s not until we see massive bankruptcies that I think the market will see a significant drive higher, because quite frankly there is that much out there. The 50 day EMA above offers resistance, so does the $1.80 level. Either one of those areas on a short-term bounce could be a nice selling opportunity.
This article was originally posted on FX Empire
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