Natural Gas Price Forecast: Extends Losses Below Key Support Levels

A bearish continuation in natural gas was triggered on Tuesday as it fell to a new corrective low $3.46, and below an uptrend line, with conviction. Trading continues near the lows of the day at the time of this writing and natural gas looks set to end the day in a similar position. A continuation of the bearish correction looks likely given today’s decline and the recent drop below the 50-Day MA and prior interim swing lows around $3.73 (B).

May be Heading To 200-Day Moving Average

The next lower target is the 78.6% retracement at $3.40. However, there is a better-defined potential support zone from $3.08 to $2.98, consisting of the initial 100% target for a falling ABCD pattern and the 61.8% Fibonacci retracement of the upswing beginning in August 2024. Also, within that price zone is the next lower trend indicator, the 200-Day MA, now at $3.04, and a prior swing high and symmetrical triangle breakout level of $3.02.

Monthly Bearish Signal

The monthly chart (not shown) is supportive of further downside as a one-month bearish reversal triggered this month. Support from March is at $3.16 and there could be some signs of support around the price level. Moreover, another bearish monthly signal would be generated on a drop below March. A bearish monthly signal especially increases the chance that the lower potential support level noted above may be reached before the current bearish correction is complete.

Bearish Correction Could Fall Farther Than Expected

If natural gas ends up falling below $2.98 and staying below it, sellers may remain in charge down to the $2.77 price zone or lower. That is the 127.2% extended target for the falling ABCD pattern. A daily close below $2.98 would signal a bearish reversal of the advance that began from the August 2024 interim swing low.

The late-January higher swing low at $2.99 is part of the price structure of that trend therefore a drop below that price level would violate the integrity of the uptrend. Additionally, there appears to be potential support around a long-term uptrend line (purple) originating from the April 2024 swing low. It identifies the next lower trend support area below the 200-Day MA. In general, once one trendline is broken, the next lower line becomes a potential target.

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