Natural gas markets have fallen a bit during the course of the session on Friday, falling towards the level of $ 3.90 which is in an area where we have seen a lot of support in the past, so I think it is likely that we turn around and show signs of life. I also see likely that the market will register random movements in that region since the $ 4.00 level is close and it is quite common for the price to trade close.
The $ 4.20 level is an important resistance barrier but if we break through I think natural gas could continue to move towards the $ 4.40 level, which in the end has been the target for quite some time. I say this because there have been a couple of bullish flags that were already pointing to a move towards the $ 4.40 level, and there is also the previous consolidation region between $ 2.40 and $ 3.40 indicating that the price could reach that region that I comment.
As the heat wave in the United States continues it is sure to cause some problems when it comes to the balance between supply and demand, and as a result we are likely to see traders trying to buy after the dips. The important thing is that the market will try to reach the target of $ 4.40 but then we will enter a dangerous scenario due to the resistance that we should find above there, so I think we should interpret the signs of exhaustion as entry signals . Despite this vision, it must be recognized that in the graph there is nothing to suggest that we are close to that scenario.
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This article was originally posted on FX Empire
