Put Options Favorable for Gas Futures As Bears Gain Momentum
Jul, 30th 04:34
Natural gas futures fell on Thursday, dragging the price to less than 2.900 after retesting the historic channel resistance area following the announcement of US monetary policy. The technical bias remains bearish due to a Lower Low and Lower High in the ongoing wave.
As of this writing, the gas futures are being traded around 2.85. A support may be noted 2.82, the 38.2% fib level ahead of 2.78, the 50% fib level and then 2.71, the confluence of 76,4% fib level as well as channel support as demonstrated in the following four-hour chart.
On the upside, the futures are expected to face a hurdle near 2.89, the intraday high of today as well as channel resistance ahead of 2.93, the swing high of the last major upside rally. The technical bias will remain bearish as long as the 2.91 resistance area is intact.
Fed Monetary Policy
The US central bank Federal Reserve on Wednesday left its benchmark short-term interest rate near zero—for the 2,417th straight day—but dropped several hints after a two-day policy meeting that it is near seeing enough improvement in the job market to prompt officials to raise the rate as early as September. At the same time, the Fed flagged nagging concerns in its postmeeting statement that inflation remains too low, which is making officials hesitant on the timing for liftoff and inclined to raising rates very gradually after the first increase. The overall tone was taken as slightly dovish by the investors which is bullish for gas futures in the long run.
Binary Options Trade Idea
Considering the overall technical and fundamental outlook, buying the put options for gas futures appears to be a good strategy in short to medium term.