Natural Gas Price Forecast: Persistent Resistance Amidst Ongoing Decline

Natural Gas Forecast Video for 07.02.24 by Bruce Powers

Another new retracement low for natural gas was hit again on Tuesday at 2.01. The decline took the price below the previous retracement low of 2.02 from last Friday. It also triggered a weekly bearish trend continuation signal. Once again, the lower boundary line of a small expanding triangle consolidation pattern was tested as support. A minor intraday bounce followed.

Persistent Weakness Leads to New Trend Low

An additional clue as to the strength or weakness of natural gas in its current technical position will be indicated by today’s closing price. At the time of this writing natural gas is trading at the lowest price during a seven-day consolidation phase and it is on track to close in that position.

Therefore, if the situation remains it will end Tuesday’s session at its lowest daily closing price since mid-April of last year. Including today there have been six new retracement lows since a week ago Monday. In addition, natural gas may break below the lower boundary line and end the day in a weaker position than closing above the line. This puts natural gas on track to test lower target levels.

Downtrend Continuation Signaled

Since gapping down and hitting a low of 2.05 last Monday natural gas has tested resistance around a prior support level almost every day since. Strong resistance is marked by the combination of the 88.6% Fibonacci retracement (orange), a downtrend line (blue), and a lower trend channel line (purple). Price has been rejected to the downside on each approach reflecting continued downward pressure. The high of the current consolidation pattern is at 2.17. Therefore, a decisive rally above that price level is needed to start to get bullish signals. Until then, a continuation lower looks to be the most likely scenario.

Trend Low at 1.91 at Risk of Being Busted

Given the absence of any signs of strength since last Monday’s gap down, a failure to get above resistance, and a series of lower highs the past five days, the decline in natural gas looks like it will continue. Therefore, a drop to new trend lows, below 1.91, is looking more likely given today’s bearish move. Nevertheless, a decisive rally above 2.17 would change the outlook to short-term bullish.

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