Natural gas markets have initially fell a bit during the course of the trading session on Friday but has turned around to show signs of support again. Ultimately, we did up forming a bit of a hammer and therefore I think what we are looking at is a scenario that perhaps traders will continue to focus on the upside, but there is a lot of resistance above.
NATGAS Video 21.06.21
The $3.40 level is an area that I think will continue to be paid close attention to as it was a major barrier and breaking above that could really get the natural gas markets rocking to the upside. The question now is whether or not we can sustain the type of bullish pressure, because we are at extreme highs in what is typically a cyclically weak time of the year, although there is a huge commodity boom going on right now that is having its effects felt over here. Furthermore, there is a tropical storm building in the Gulf of Mexico, and I think that is a major influence as well.
Having said all of that, if we break down below the lows of the last three days, that would be a very negative sign and could send this market reeling towards the 50 day EMA, which is currently sitting at the $3.00 level, an area that obviously has a certain amount of psychological importance built into it. With that being the case, I think that we have a couple of clear areas that we can trade from, and between these two areas we basically have consolidation just waiting to happen in a confused yet bullish market.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
More From FXEMPIRE:
