Natural Gas Price Forecast: Tests First Key Support Following Breakout

The pullback in natural gas from the recent 3.53 swing high continued on Monday with a drop to a low of 3.15. A new lower daily low and lower daily high will be generated today, the third day in a row. Also, of interest will be where the day closes. The lowest daily close for the pullback was last Thursday at 3.195. If Monday ends below that price level, it will be a somewhat bearish sign. Furthermore, a close below the prior low of the pullback at 3.175, would also be short-term bearish.

Will Support at 3.16 Prior Swing High Hold?

Previous resistance around the June peak of 3.16 was tested as support today. It has stalled the decline so far, but whether it continues to do so remains to be seen. The 50% retracement level is at 3.13, and it was almost reached today. Although natural gas has reached a price zone where support may be seen there is no sign of increasing demand or a bullish reversal. Therefore, the expectation is for a continuation lower upon a decisive drop below today’s low.

Lower Target Zone From 3.04 to 2.90

If natural gas does fall below today’s low and continues to decline, then previous resistance from the 3.02 swing high may be the next area of support. However, there are price levels nearby to be aware of as well. One guide is provided by the internal uptrend line. But clearer price levels where support may be seen are from 3.04 to 2.90.

A falling ABCD pattern (purple) reaches its 100% downside target around 3.04. Then there is both a prior swing high and the 61.8% Fibonacci retracement at 3.02. And most importantly, the 20-Day MA is at 3.01. The 20-Day line has been successfully tested twice as support since it was reclaimed on October 29.

First Signs of Bullish Reversal Above 3.28

There is also the possibility that the day’s low price completed a retracement. If that is the case a decisive rally above today’s high of 3.28 indicates improving demand. Friday’s high of 3.38 would then need to be reclaimed for further signs of strength. Since natural gas is within the first pullback following a decisive bull breakout, it presents an interesting potential setup that will be watched closely by market participants.

It is currently within the first pullback following a significant breakout. On November 20 natural gas busted through the 3.02 swing high resistance level and triggered a breakout of a symmetrical triangle pattern and the continuation of the uptrend begun from the 2024 low of 1.52.

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