Natural Gas Price Forecast: Weakens but Holds Trendline Support

Natural gas fell to test support around a rising trend line on Friday with the day’s low of 3.29. The 78.6% Fibonacci retracement level is at 3.29 as well. An intraday bounce followed the 3.29 low and natural gas is attempting to end Friday and therefore the week, above the 20-Day MA, currently at 3.37. If it does, that will be slightly more bullish than if not.

Integrity of Price Structure Retained

Given that today’s low maintained the integrity of the uptrend relative to the trend line, it could be the completion of a pullback that is followed by strength. But what makes it interesting is that a drop below today’s low would question the integrity of the uptrend price structure as the trendline would be broken. Potential support around the 20-Day MA would already be broken prior to the trendline being reached. So, the bullish thesis would be proven wrong if there was a drop below today’s low.

Drop Below Today’s Low Would Be Bearish

A decisive decline below today’s low of 3.29 puts the recent interim swing low at 3.09 and the swing low at 2.98 (C, red) in view of being tested as support. Significantly, potential support around the 50-Day MA is also around the prior low, at 3.02. Together, a potentially significant support zone from 3.09 to 2.98 is identified.

Take note that the breakout from a symmetrical triangle pattern triggered above the 3.02 swing high. A test of that price area as support would be the second test following the triangle breakout and would follow the initial pullback to 2.98. Nonetheless, price behavior will lead the way forward by how it behaves around key price levels.

Strength Returns Above 3.45

The next sign of strength would be with a rally above today’s high of 3.45. That would put natural gas back above the 20-Day prior support line and in place to track higher. Initial resistance may be seen around the prior highs of 3.55 or the 2023 high of 3.64.

A long-term bullish signal was triggered only recently in natural gas as it broke out above the top of the triangle pattern at 3.02 on November 20. That advance also triggered a continuation of the rising trend that began from the February trend low. The subsequent rise above the 2023 peak provided additional evidence for the bulls as that rise initiated a longer bullish trend reversal signal.

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