Natural gas markets have broken down significantly during the trading session on Friday, losing 7%. That of course is a horrific number, but quite frankly it’s likely that the gap underneath should continue to offer support. Beyond that, we are also testing the uptrend line, and it looks as if the market will need to make a serious decision here. That being said though, we are getting warmer than usual temperatures forecasted for the middle of December and that of course is a very negative sign for demand. That being said though, we are at very historic lows, and at this point it’s likely that we will continue to see a lot of value hunters down here, but if we break down below the uptrend line, the market then goes down to the $2.20 level. If we break down below there, then it’s likely to go down to the $2.00 level.
NATGAS Video 02.12.19
All things being equal though, this is a market that historically is very bullish and winter, but if we end up getting warmer temperatures in the United States during the winter, and therefore it’s likely that we will continue to see areas of support and therefore it’s likely it’s only a matter of time before we bounce. Ultimately, this is a market that is in a freefall, so you will need to see a couple of days of stability before getting involved. You do not want to step in front and “catch a falling knife” in this environment. Liquidity was also very low during the Friday session, so I would not read too much into the size of the candlestick.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
More From FXEMPIRE:
- Natural Gas Price Prediction – Prices Tumble as Hedge funds Press Their Advantage
- USD/JPY Forex Technical Analysis – Price Action Suggests Short Top is Forming
- AUD/USD and NZD/USD Fundamental Daily Forecast – Capex Data Pressures Aussie, Business Confidence Rebound Supports Kiwi
- Crude Oil Price Forecast – Crude Oil Markets Fall Hard On Friday
- Crude Oil Weekly Price Forecast – Crude Oil Markets Get Hammered
- Natural Gas Weekly Price Forecast – Natural Gas Markets Testing Major Trend Line