Natural Gas Price Forecast: Bullish Reversal Faces Critical Resistance

The Bigger Picture Still Leans Higher

Thursday’s advance also triggered a bullish reversal signal on the larger timeframe, as natural gas rallied above last week’s high of $2.93. This pattern suggests that further upside is likely to eventually follow before this week’s higher low of $2.81 fails as support. The weekly chart shows an initial upside target near the higher swing low at $3.06. Therefore, while near-term resistance remains a concern, the larger timeframe structure continues to leave room for an eventual move higher.

Support Defines the Risk

Short-term support is Thursday’s higher daily low, followed by Wednesday’s low of $2.84. The lower level aligns closely with an uptrend line and the 78.6% Fibonacci retracement at $2.82, while the lower boundary of the broadening pattern is represented by the falling trendline. A break below this support area would increase the risk of a deeper decline and brings the lower boundary of the pattern into play.

The $3.00 Barrier Comes into Focus

Key dynamic resistance is represented by the falling 20-day moving average, now near $3.01. It is also converging with the $2.97 to $2.98 resistance zone, adding to the significance of that zone and potentially reducing the likelihood of a continuation higher. Nonetheless, if support can hold and the 20-day moving average is reclaimed, the 50-day moving average near $3.12 marks an upside target zone, along with the daily high from July 9 at $3.16.

That high is a proxy for the breakdown level from an ascending broadening wedge pattern that triggered to the downside two weeks ago. Therefore, a sustained move above the $2.97 to $3.01 resistance zone would strengthen the bullish reversal setup and open the way toward $3.12 and potentially $3.16, while failure at the zone would leave natural gas vulnerable to a retest of lower support.