Category: Forex News

Natural Gas Price Forecast: Downtrend is Clear but Rally Above This Week’s High is Bullish

Stuck in Consolidation Range from 1.64 to 1.77

The last five days of trading occurred within a consolidation range defined by the high and low levels seen on March 14 and 15. It shows a range from 1.64 to 1.77. Today would have been a perfect day for more serious selling to occur following Wednesday’s decline and break below the prior day’s low. if it was going to do so eventually, this would be the day. Instead, natural gas fell below yesterday’s low to 1.65, where it found support and rallied. It continues to advance towards the open at the time of this writing.

Today’s Range Provides Near Term Price Levels

Today’s high and low provide price levels to use to identify the next direction for natural gas. If the high of 1.77 is exceeded there is a chance it will continue to strengthen, at least towards the top of the range. The low today is 1.65. If that price level fails to maintain support the chance for a test and possible decline below the recent swing low of 1.64.

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Recent Price Action Rallying into Resistance is Bearish Behavior

As discussed previously, natural gas is in a clear downtrend in all time frames. Since it failed to rally above resistance at 2.01 recently, the chance for a bearish continuation remains a real possibility. That price zone previously represented support. So, support becomes resistance, which is a sign that downtrend is showing signs of continuing. Further, the 20-Day MA failed to maintain support on March 12, and it has marked resistance on each of the past five days.

Advance Above 1.77 is Bullish

Sometimes when a pattern is very clear, the opposite of what is expected occurs. That may or may not happen in this case. The market is clearly showing bearish signs but that changes in the short term on a rally above this week’s high of 1.77, assuming that is the high for the week.

For a look at all of today’s economic events, check out our economic calendar.

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Written by : Editorial team of BIPNs

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