Natural Gas Price Forecast: Breaks Trend Low, Eyes on $2.00 Support

Natural gas triggered a bearish continuation signal for the downtrend on Friday as it fell below the prior trend low of 2.015 to reach a new low of 2.00. Nonetheless, 2.00 was resistance back on April 10 and it could hold as support now with today’s test of that price area.

It doesn’t look like it given the breakdown to a new trend low that triggered today. However, it is possible that the 2.00 continues to hold as support and leads to a bullish reversal. Today’s price range was relatively narrow with a high of 2.08 and a low of 2.00. Whichever price level is triggered next will indicate the direction.

Break Below 2.00 Targets 1.92

A decisive break down below 2.00 will indicate a likely continuation of the bearish trend. Natural gas would then be heading towards the next lower support zone that is anchored around the 78.6% Fibonacci retracement at 1.92. The 1.94 price area can also be watched as it was resistance previously at the minor swing high on April 10 and may show support now. Notice that there is an unfilled gap that will be filled at 1.94.

Be aware that support from the month of May was seen at 1.91, a three-month low. If the current bearish retracement does not find support above 1.91, a monthly bearish continuation signal would be triggered on a drop below 1.91. If that happens then the next lower support zone from around 1.85 to 1.80 could be next on the agenda.

Weekly Bearish Signal Triggers Today

The decline today triggered a bearish weekly continuation as last week’s low of 2.015 was exceeded to the downside. Since the current week ends today natural gas is on track to close weak, near the lows of this week’s trading range. This is bearish behavior that increases the chance for a test of lower support levels.

If it ends the week below last week’s low a clearer bearish indication will be given. Regardless, this will be the sixth week in a row of lower weekly highs and lower weekly lows therefore signaling a bearish continuation of the decline.

Rally Above Today’s High of 2.08 Signals Strength

There remains a chance that the 2.00 support zone will hold and see demand increase. That scenario would be indicated on a rally above today’s high of 2.08. The 20-Day MA at 2.26 along with this week’s high of 2.27 would be the initial upside pivots.

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