Natural Gas Consolidates at the Bottom, With a Possibility of Further Decline.

Bruce Powers
Published: Mar 23, 2023, 19:40 UTC

Natural gas remains under pressure, with a possibility of further declines looming large.

Natural Gas, FX Empire

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Natural Gas Forecast Video for 24.03.23 by Bruce Powers

Natural gas further consolidates around the bottom with no sign of strength. It remains within the range from two days ago where support was seen at the 88.6% Fibonacci retracement. Downward pressure remains with natural gas targeting lower prices.

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Bearish Trigger Below 2.24

A drop below the three-day low and pullback low of 2.24 (C) provides the next bearish signal. The first target is then the most recent low of 2.11 (A). If natural gas falls further from there the more obvious price levels where support could be seen includes a prior swing low of 2.05 from August 2019, 1.98 from April 2012, and 1.73 from March 2016.

Movement Should Pick Up Before Three Days

Something should happen within the next few days as the downtrend line will be reached within a couple of days. It will then either designate resistance and prices fall or price will rise above it. By itself, a break above the line is not very reliable. It primarily provides additional context for price behavior. The primary price levels to watch for signs of strength are recent daily and weekly highs, plus a moving average.

Stuck in Three-Day Price Range

Three-day price action has a low of 2.24 (retracement low) and a high of 2.49. A decisive breakout above the three days high can therefore be used as a first sign of strength, although minor. We really should see a break above this week’s high of 2.52 to have greater confidence that strength may be sustainable. Also, we could see natural gas go sideways for some months rather than reversing and rising higher within a reasonable period of time.

Bullish Triggers Above Weekly High

Subsequently, a move above the highs of each of the past few will provide further confirmation for strengthening. Those weekly highs to watch are last week’s high of 2.79, followed by the three-week high at 2.95. Of course, the most significant break would be on a move above the most recent swing high of 3.16. At that point the developing downtrend price structure of lower swing highs and lower swing lows would be negated.

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About the Author

Bruce boasts over 20 years in financial markets, holding senior roles such as Head of Trading Strategy at Relentless 13 Capital and Corporate Advisor at Chronos Futures. A CMT® charter holder and MBA in Finance, he's a renowned analyst and media figure, appearing on 150+ TV business shows.

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