Natural gas markets continue to be very volatile, gapping higher at the open on Thursday before rolling over and filling the gap. Ultimately, I think we are still going to the top of the huge pink box that I have drawn on the chart, meaning the $2.00 area. Longer-term, I do not know if we can break above there because I see a significant amount of resistance extending to the $2.10 level, but right now this is a market that we have going. We are simply bouncing around between the $2.00 level on the top and the $1.50 level on the bottom.
NATGAS Video 31.07.20
For what it is worth, the $1.50 level has been massive support on longer-term charts, so it should not be a huge surprise that we have bounced from there several times. I think at this point we are trying to build some type of base for the winter as several US companies have gone out of business and of course hotter temperatures than usual in the United States have been driving up demand. Beyond that, we have to then questioned whether or not supply will be an issue this winter.
I do not know that it will but once it gets a bit colder, we may see a drive higher. The question now is whether or not we are forming some type of basing pattern for the winter? I suspect that might be the case, but in the meantime simply playing this range makes the most sense. I think we do go a little bit higher before we pull back again substantially.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire