Natural Gas Forecast Today - 2/02: Longer-Term Range (Chart)
(MENAFN- Daily Forex)
The natural gas market exhibited a slight decline during Thursday's trading session, signaling a prevailing negative sentiment. However, it is important to note that the market currently hovers just above a crucial support level as indicated on longer-term charts. Consequently, there is an expectation that traders will continue to engage in back-and-forth trading within this market.
Natural Gas Continues to Churn
Natural gas made an initial attempt to rally during Thursday's trading session but subsequently relinquished its early gains. The $2 level is viewed as a significant support threshold and potentially marks the lower boundary of the prevailing consolidation range, which is expected to persist in the longer term. This is a market that does this quite often, so it should not be a huge surprise that it would again in 2024.
Natural gas traditionally undergoes a consolidation phase for a majority of the year. Given that the winter season is drawing to a close, the likelihood of witnessing another spike in prices remains limited and would likely be of a short-term nature, mirroring recent occurrences. The winter period has been marked by underwhelming demand, contributing to an oversupply of natural gas, which continues to pose a substantial challenge.
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For short-term traders, opportunities may arise in the form of buying on price dips, although these trades are expected to be of a short-term nature. Fair value currently revolves around the $2.50 mark. A breach above this level could potentially pave the way for an ascent towards approximately $3.33, although the $3 level is likely to exert its influence.
Conversely, a scenario in which the market experiences a breakdown below the $2 level would represent a significant development. However, such an outcome appears less likely, given the historical resilience of the $2 level as a support point.
Expectations for this market include choppy volatility and a prevailing range-bound pattern. Traders adept at employing range-bound systems, such as stochastic oscillators or other similar tools, may find this market suitable for their trading strategies in the coming months. Notably, the market currently leans closer to its lower boundary than its upper limit, thereby prompting a search for buying opportunities. However, it is advisable to capitalize on profits promptly, given the market's characteristic erratic and choppy behavior.
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