Natural gas markets continue to show exhaustion on rallies, as we ended up forming a bit of a shooting star for the weekly candle stick. The $2.20 level continues to be an issue, as it has not only been supported but now resistance several times. There’s also a downtrend line just above that should continue to keep a bit of downward pressure on this market as well. Remember, we have been in a downtrend against the natural gas markets for quite some time, mainly due to the massive oversupply of the commodity around the world.
NATGAS Video 19.08.19
All things being equal, I like fading this market but it’s going to be difficult to do on longer-term charts. If you are a longer-term trader you are starting to focus on the winter months in the northern hemisphere, and therefore you should be looking for some type of breakout. I don’t think we are going to see that anytime soon but the first signs of the trend change that is cyclical for cold temperatures will be if we can break above the downtrend line. After that, we would need to break above the $2.50 level. I don’t see either these happening in the short term, so I think you are going to be looking at short-term trading more than anything else with a very negative bias. Not only does natural gas have to worry about in oversupply and the temperatures not being cold enough to increase demand, as it typically is more desired in winter months, but we also have to worry about global demand due to slowing economies.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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