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Natural Gas Price Technical Analysis for January 2: A pullback will come soon

2024-01-03

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On Tuesday (January 2), American Natural Gas continued to rise sharply and was now at 2.640, an increase of 5.02%; American Natural Gas reported 2.646 on 02, an increase of 5.25%.

On the 4-hour chart, natural gas prices are trending upward, with the recent lows connected to the uptrend line. A pullback to this support area may be imminent.

The Fibonacci Retracement tool shows the price levels that buyers may be focusing on. The 38.2% Fibonacci retracement is around $2.544, and the 50% retracement is at $2.511. A larger retracement is at the 61.8% Fibonacci retracement level at $2.478, which is close to the uptrend line and the major psychological level of $2.500.

If any of these factors provide support, natural gas prices could move back toward swing highs of $2.651 or higher. A break below the trend line could trigger a reversal in the uptrend.

The 100 SMA remains above the 200 SMA, suggesting the path of least resistance is to the upside, or that support is more likely to hold than be breached. Dynamic support from the moving averages is also near the uptrend line, adding to its strength as a bottom.

The stochastics are already signaling overbought conditions or buyer exhaustion, so a turn lower would signal a return of bear market pressure. The indicator has plenty of room to fall before oversold conditions are reflected.

The RSI has also moved downward from overbought territory, indicating the return of selling pressure, so price may follow and continue to adjust until oversold conditions are met.

Natural gas may take a cue from the U.S. Department of Energy's inventory data, as drawdowns would confirm demand for the winter heating commodity is picking up. On the other hand, if the number of homes increases significantly, it indicates that supply remains high.

Top market catalysts such as Federal Open Market Committee meeting minutes and non-farm payrolls data will also be released this week. These events may affect the Fed's interest rate expectations and market sentiment.

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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Natural Gas Price Technical Analysis for January 2: A pullback will come soon

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