Natural Gas Reverses Course, Shows Signs of Strength - FX Empire
Natural Gas Reverses Course, Shows Signs of Strength
Bruce Powers
Natural Gas Forecast Video for 14.03.23 by Bruce Powers
Natural gas triggered a daily bullish reversal Monday off a key support level discussed previously. The support range is from 2.51 to 2.47 and natural gas turned higher just shy of the 2.51 price level. Subsequently, it triggered a bullish reversal on a move above Friday’s high of 2.69. It currently looks like natural gas is on track to close above Friday’s high as well thereby providing confirmation of the bullish move. Once a daily close occurs above the high the chance for another test of the lows diminishes.
Buyers Step in Near 50% Retracement of February’s Range
Natural gas retraced almost exactly 50% of the February monthly range before finding support that rejected price to the upside. The 50% mark is 2.50 and Monday’s bullish reversal occurred off a 2.51 low. This is a logical place to see buyers stepping in more aggressively and there’s a good chance the pullback is over and natural gas can continue its way higher.
Watch for New Strength on Moves Above 2.90 and 2.95
Next, there is the February monthly high at 2.90 to get above followed by the weekly high at 2.95. Exceeding each will provide additional signs of strength. As a reminder, last month completed a bullish hammer candlestick pattern and a bullish trigger has already occurred with strength confirmed on a couple of daily closes above that high. Given that the hammer is a monthly pattern it is especially significant as a longer time frame signal can play out over some time.
Eventual Target Zone Near 3.44 to 3.54
Once the most recent swing high around 3.15 is cleared to the upside natural gas heads towards a potential resistance zone from around 3.44 to 3.54 and highlighted in red on the chart. Given today’s swing low an ABCD pattern will also complete within that zone, and it also includes a couple of Fibonacci levels and previous price support or resistance.
In case today’s swing low does not hold and natural gas falls further the next lower support range is from around 2.37 to 2.33 and includes a couple of Fibonacci levels. Of course, a continuation off the halfway mark of the February range is more bullish than if a deeper correction lower occurs.
For a look at all of today’s economic events, check out our economic calendar.