During the course of the week, natural gas markets initially attempted to advance, but it’s likely that we will continue to observe a great deal of overhead commotion at this time. After all, we wound up shaping something resembling an inverted hammer, so this does indicate that there may not be sufficient momentum to move. As we seem to have a bit of a barrier near the $3.00 level and the $2.00 level below, I believe it’s likely that we’ll continue to see a lot of sideways movement for the foreseeable future. In other words, we may be at a standstill, and consequently, longer-term speculators will likely struggle.
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Obviously, if we break out of this range, it could indicate that we are set for a bit of volatility trading, perhaps with a move toward $4.00. Currently, the 200-Week Exponential Moving Average is also located there, and it appears that the price is falling. Alternatively, if we break below the $2.00 level, the market is likely to fall to the $1.80 level, although I do not believe this to be the most probable of outcomes.
As the northern hemisphere enters a period of higher temperatures, it is likely that natural gas prices will fall due to a lack of demand. Moreover, if a global downturn is imminent, it is conceivable that demand from the industrial sector will decrease as well. I believe we will spend the majority of the remainder of the year consolidating and determining whether or not we can rally next winter.