Natural Gas Price Forecast: Potential Pullback Ahead as Price Approaches Key Levels

Additional consolidation around this week’s high of 2.26 continues in natural gas today as it tests support around 2.17. The 2.17 price level was busted last week on the rally to the 38.2% Fibonacci retracement target zone and now is showing minor support. Further signs of strength were seen briefly earlier in today’s session as the 2.26 high was exceeded to reach 2.27. However, it looks like natural gas may end in the red and short-term bearish, in the lower third of the day’s price range. Subsequently, if it falls below today’s low of 2.17 a deeper retracement may be in the works. And a decline below Tuesday’s low of 2.14 would further secure the pullback.

Failed Continuation

Price areas to watch on the way down include 2.09, 2.01, and a range from 1.95 to 1.93. The first level was previously the trend high from April 30. It is followed by the initial target from the rising ABCD pattern. And the lower range is derived from the April 2023 trend low and 50% retracement, respectively. Given today’s minor weakness following a new trend high, it looks likely that a pullback may come before new trend highs. Even if a new high is launched it may quickly encounter resistance as seen today as the launch pad is of questionable integrity.

Upside Target Begins at 2.37

Nevertheless, if the trend does continue higher, the next primary target zone is from around 2.37 to 2.47. The relatively long-range begins an approach towards the 200-Day MA at 2.40. A rising ABCD pattern with the CD leg extended by 161.8% of the AB leg is at 2.46. Moreover, a measured move completes at 2.40, followed by the 50% retracement at 2.37. The measured move is a match with the rally from the December 13 swing low on a percentage basis. That rally saw the price of natural gas rise by 51.8%. A similar percentage advance in the current rally completes at the 2.40 price level. The December 13 advance is being used as it was the largest advance of the past three rallies.

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