Price in the Natural Gas market (XNGUSD) collapsed lower last week, and through the major daily support level. After forming a Bearish Engulfing Bar = BEEB on the daily price action chart, price sold off aggressively to be below the super important price flip level that price had only found support at recently.
Now that price is below this important level, it is ALL eyes to see where price goes next, especially that price has just broken the old support level overhead. The other major reason that there is now a huge watch on the price action in this market is because with the break of that major support level, came a HUGE amount of space with it.
The breaking of that support level was a bit like a breaking of the flood gates. If you zoom your charts out and look at the traffic or support and resistance areas, there is not much at all until the 2.2385 area. If you compare that with the traffic and support/resistance areas overhead, then you will see what I mean.
Before price broke lower and through the support level, it had a lot of levels to contend with and that’s why I liken it to a bit of a breaking of the flood gates because all of a sudden, price goes from being contained to being in space and freedom.
The question is how can we look to take advantage of this and, can price continue into this free flowing move down into the next major support areas? This is why the big watch is on the price action of this market.
That is where the “Kill Zone” comes in. Don’t know what a kill zone is? You need to find out. Go over, after you have finished reading this update, and read this lesson here: How You Can Target Super High Probability Price Action Trades at the “Kill Zone.”
Price is now looking like it may pull-back into the kill zone. If this does happen, you could begin to look for high probability short trades. This would be trading inline with the new strong momentum lower, and at a major resistance price flip level. Any trades you do take would need to be confirmed with high probability A+ trigger signals just like the ones we teach members in the Forex School Online Price Action Course.
Daily Chart – “Kill Zone”
Daily Chart – Major Daily Price Flip Level
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