(MENAFN- Daily Forex) The natural gas market experienced a drop during the trading session on Thursday, and this is likely due to the noisy behavior of the market in general. Traders should keep in mind that the $2.00 level is an important psychological support level that may offer some relief against selling pressure. However, if the market were to break down below this level, it could lead to a black hole situation, with fear of missing out (FOMO) shorting coming into play.
Advertisement take advantage of today's crude oil movements trade now From a technical analysis standpoint, the 50-Day ema is currently dropping and sits near the $2.84 level. Just above that, we have the $3.00 level, which is also an important psychological level. Breaking above that level could open the possibility of moving to the $4.00 level, but at this point, traders should be cautious about the possibility of signs of exhaustion after a short-term rally. Be CautiousDespite the psychological importance of certain levels, there is no real reason to believe that the natural gas market could bounce back. This is since temperatures are expected to start rising in the United States and Europe, which will likely drive down demand. Additionally, traders need to be concerned about the potential for a decrease in industrial demand due to negative economic activity. Until the global economic situation improves, it's very difficult to imagine that natural gas will suddenly take off to the upside. Quite frankly, I think natural gas is more likely than not going to languish for the next several months, as we are in a warming part of the year for the northern hemisphere, which obviously is where most natural gas consumption occurs from a global standpoint. Ultimately, traders need to be cautious about the demand for natural gas in the future. The market is noisy and uncertain, and there may be selling opportunities if there is a bear market rally. In this environment, it is important to stay informed about the market conditions and to make decisions based on a careful analysis of the weather patterns and of course GDP numbers coming out of various major economies. Ultimately, you will need to see some type of turnaround for natural gas to have a real shot at taking off to the upside. It's very possible you may be sitting on your hands until fall.Ready to trade natural gas forex ? Here's a list of some of the best commodity trading brokers to check out.
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