Natural gas futures continued to struggle for a breakout above psychological resistance at $6 during the last week after the announcement of weekly stockpiles last Thursday.
On Friday, gas prices closed the week at $5.559 after testing a low at $5.405. Undoubtedly, this closing move showed some strength. But the natural gas futures showed weakness that could affect the next directional movement in the coming week.
The opening level on the first trading session will provide clues about the next directional moves. I expect three probabilities of opening levels on the first trading session of the upcoming week that you may see in the chart below.
If the natural gas futures find a sustainable move above the mean support at $5.859 will encourage bulls to test $6.288 during the upcoming week. Only a sustainable move above $6.2 will push the price up to $6.504. On the lower side, a breakdown below $4.888 could continue to drag down the price towards $4.467.
Shifting the weather outlook for upcoming winters, from warm to colder, could continue to provide buying support to natural gas futures that could result in sudden pull-backs in between the selling sprees. Undoubtedly, value-seeking buyers could return if the natural gas futures move towards $4.467.
Growing expectations over the global economic recovery could add more demand for natural gas for industrial use. The uptrend could continue as the production level is still under recovery after the denting impact of the recent hurricane season.
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