Natural gas markets continue to be noisy, as we had a relatively tight trading session on Thursday. Ultimately, the market is likely to see more noise, as there are multiple factors out there that can continue to push this market wildly. The 50 day EMA of course attracts a lot of attention, and therefore it will be interesting to see where we resolve this issue. Having said that, I think that is likely that we will see a lot of erratic behavior in the market.
NATGAS Video 29.05.20
To the downside I think that the $1.80 level is likely to offer a certain amount of support, so I am looking for short-term pullbacks in order to buy the contract for short-term trades only. Ultimately, the market is trying to build a larger basing pattern from what I can see, as economy start to open up again. Ultimately though, the question will come down to whether or not the demand finally picks up enough to take out the massive oversupply. We also have bankruptcies coming so that could help as well. We are at extremely low levels so I do anticipate that the market will try to bounce but it is not going to be extremely easy to deal with.
With that in mind, even if we do break down below the $1.80 level, it is likely that we will see the previous gap at the $1.70 level also offering it. If we can break above the $2.00 level, then it is likely that the market will then go looking towards the 200 day EMA just above.
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This article was originally posted on FX Empire
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