Natural gas markets initially tried to rally during the trading session on Thursday, but the $2.00 level continues offer extraordinarily negative pressure. That is a large, round, psychologically significant figure, so it’s not a huge surprise to see that it would continue to affect the market. That being said, the market is very likely to try to break through it sooner or later, but I see a significant amount of resistance extending all the way to at least the $2.20 level above. The 50 day EMA is currently reaching towards that level, and therefore it should be noted that the level will be extraordinarily difficult to reach above.
NATGAS Video 24.01.20
At this point, market participants probably continue to see a lot of volatility, and as we are rolling over into the March contract, this is going to put more pressure upon natural gas as there are more than likely going to be demand concerns as temperatures rise in the United States. With this, natural gas has been a disaster this winter and quite frankly I don’t see how it changes anytime soon. The only way out for natural gas to the upside is going to be bankruptcies of drillers in the United States. That’s coming, based upon the credit rating downgrade is that we continue to see.
I believe that fading the rallies will continue to be the way going forward in this market, and quite frankly it’s difficult to imagine a scenario where suddenly everything changes. If we do get some massive spike higher due to a winter storm or anything like that, it should be a nice selling opportunity.
This article was originally posted on FX Empire
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