Natural Gas Today 08/01: Bullish Consolidation (Video)

(MENAFN- Daily Forex)

• As I look at the natural gas market on Tuesday, but really at this point in time, I think we are in the midst of consolidation.
• I do expect that eventually the natural gas market will try to break above the $4 level, but it's going to take some effort.
• The cold temperatures in the United States, trust me, I'm very well aware of them, continue. With this being the case, I think natural gas demand will continue to be somewhat strong.

Now keep in mind, sooner or later, in the next 30 days to 40 days or so, we'll start to focus more on spring. But right now, we probably have another bounce or two left in the natural gas markets . This is typically the case this time of year, as the weather is still rough.

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Underneath, I see the $3.40 level as being important, especially as the 50-day EMA is racing toward it. If we can clear the $4 level, that opens up a move to the $4.50 level. Natural gas is a very cyclical commodity, so you have to be aware of that because it's mainly driven by cold weather in the North, especially in the United States. But we also have the added complexity this year of Europeans probably being forced to buy liquefied natural gas from America, which will cost them three to four times what it normally would because of the process and the shipping and everything else. With this, it ties into the rest of the world as far as the US outperforming Europe. As long as we can stay above the 50 day EMA, I'm still looking at pullbacks as a buying opportunity. And I do think that at one point or another, it's very possible natural gas reaches $5.

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