- At the beginning of this week, we saw a smaller gap down in oil prices from $81.00 to $80.50.
- On Friday, the natural gas price faced resistance and reached the area around $1,740.
Oil chart analysis
At the beginning of this week, we saw a smaller gap down in oil prices from $81.00 to $80.50. The price managed to hold above this low and began an upward consolidation, returning above the $81.00 level. The current momentum is so strong that we are close to testing last week's high of $81.58. Today's high is at $81.44, and we could easily test the previous high by the end of the day.
Possible higher targets are the $82.00 and $82.50 levels. We need to pull back below the $81.00 level to get a bearish option. This brings us back below the high Asian price. We are also moving away from the downward path, which is adding to the downside pressure on oil. We then turned towards this morning's low at $80.50. Another test could lead to a decline towards a new daily low thus confirming the bearish presence. Possible lower targets are the $80.00 and $79.50 levels.
Natural gas chart analysis
On Friday, the natural gas price faced resistance and reached the area around $1,740. Pressure in that area at the 200 SMA brought the price down to $1.63 by the end of the day. During the Asian session this morning, we saw bullish consolidation from Friday's lows all the way to the $1.73 level. In the EU session, we continued this consolidation, returning to $1.74 and testing the EMA200.
We hope to see a breakout to the upside and the price of natural gas to rise to higher daily levels. Possible higher targets are $1.75 and $1.76. If we fail to move above, a new pullback will follow. We are once again heading towards the previous support area. Possible low targets are $1.71 and $1.70. The 50 EMA located in the area, around $1.70, could give us some support.
