Natural gas markets initially fell during the trading session to reach towards the bottom of the Thursday candle. However, we have bounced from there and now it looks as if the support is trying to come back into play. If we can break above the top of the candlestick for Friday, then we will test the $2.40 level which is also a major resistance barrier. If we can get above there, then we could go much higher. Unfortunately, this is a market that will be moving on the next weather report, and as a result we continue to see a lot of downward pressure as temperatures are supposed to be as cold as usual going into the Christmas holiday. That being said though, it is only a matter of time before that changes and it’s likely that the demand will pick up rather soon.
NATGAS Video 16.12.19
Looking at the market, one of the biggest problems it has is that the Americans drilled 17% more this past year than the previous one, so it’s taking a while to choose through supply. However, it is only a matter of time before we do, and spike higher. If we can break above the $2.40 level it could be the sign that the bullish traders out there are waiting for. This would be a short-term opportunity, and then offer a nice selling opportunity for the longer-term. In the immediate area though, it looks like we are ready to go sideways as we continue to dance around the gap which formed at the beginning of the week.
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This article was originally posted on FX Empire
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