Natural Gas Price Hit a Multi-Week High, What’s Next?
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Natural Gas Technical Outlook
- Natural gas price rallied to a multi-week high
- Positive outlook while above $1,850
Natural Gas Price – Bullish Development
Last week, natural gas hit a two-week high of $1,863 then closed a weekly candlestick in the green with a 6.3% gain, highlighting that bulls were back.
Alongside that, the Relative Strength Index (RSI) crossed above 50 indicating a possible start of bullish momentum.
Nat-Gas DAILY Price CHART (Dec 2, 2018 – July 30, 2020) Zoomed Out
Natural Gas DAILY Price CHART (June 19 – July 30, 2020) Zoomed IN
On July 23, natural gas closed above the 50-day moving average indicating a shift in favor of bull’s control. The price remained above this indicator then climbed yesterday to the current $1,850 - $2,050 trading zone and printed a three-week high at $1,941.
A daily close above the high end of the current zone could encourage bulls to push natural gas towards the monthly resistance at $2,139 ( April 2019 low).
On the other hand, a daily close below the low end of the zone may guide natural gas’s fall towards the weekly support at $1,655 ( July 22 low).
Natural Gas price Four-Hour PRICE CHART (JULY 21 – July 30, 2020)
Yesterday, natural gas failed to break below the bullish trendline support originated from the July 22 low at $1,653 allowing bulls to rouse momentum.
To conclude, while bulls remain in charge a break below the aforementioned bullish trendline highlights a weaker bullish sentiment. Therefore, a break below $1,822 could send the price towards $1,765, while a break above the July 7 high at $1,946 may trigger a rally towards $2,040. As such, the support and resistance levels underscored on the four-hour chart should be kept in focus.
Written By: Mahmoud Alkudsi, Market Analyst
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.