Natural gas continued to break out to fresh contract highs on Wednesday, the third consecutive day with a higher close. The rally comes ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 48 Bcf draw in stockpiles according to survey provider Estimize. Warmer than normal weather is expected to cover most of the United States over the next 6-10 and 8-14 days. According to the National Oceanic Atmospheric Administration, there is one tropical storm in the Atlantic or Gulf of Mexico that has a 10% chance of becoming a tropical cyclone over the next 48-hours.
Natural gas prices continued to rise on Wednesday. The August contract closed at an all-time high for the third consecutive trading session. Target resistance is now the 2018 highs at 4.92. Support is seen near the former highs at 3.82 and then the 10-day moving average at 3.74. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are overbought. The current reading on the RSI is 71 above the overbought trigger level of 70 which could foreshadow a correction. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line crosses above the MACD signal line. The MACD histogram also generated a crossover buy signal.
This article was originally posted on FX Empire