Natural Gas Price Forecast: Holds Support, But Bearish Pressure Remains

Drop Below $3.45 Points to $3.38

A decline below Wednesday’s low of $3.45 will trigger a continuation of the bearish pullback and increase the chance for a decline below a minor higher swing low at $3.44. A breakdown on the weekly chart triggered yesterday below $3.50. But the bearish signal was not yet confirmed by a daily close below that price level. Since tomorrow is Friday, a closing price below last week’s low of $3.50 would confirm the bearish signal on a weekly time frame. Lower price targets include the 61.8% Fibonacci retracement at $3.38 and the 200-Day MA, currently at $3.31.

Furthermore, natural gas may test the lower line of a rising trend channel as support if it falls further. Notice that after Monday, the lower channel line will start to mark a price point that is above the 61.8% retracement level. Also, the 200-Day MA is below the channel but rising slightly.

Strong Resistance Seen Near Neckline

Despite the potential for lower prices, a decisive rally above today’s high could lead to higher prices. It is also possible that natural gas consolidates above current support before it is ready to confirm its next direction. Following the April swing low (A) natural gas made several attempts to break above resistance around the neckline of a head and shoulders top pattern. That shows strong resistance that may continue to be sustained or eventually lead to an upside breakout above the recent high of $3.84 (B). Nevertheless, the bearish reaction around the neckline shows downward pressure in natural gas.

For a look at all of today’s economic events, check out our economic calendar.