Natural Gas Forecast: Testing Support Levels Amidst Retracement
Natural Gas Forecast Video for 06.09.23 by Bruce Powers
Natural gas fell hard today to test support around the lower uptrend line. Today’s low was 2.566, which exceeded the 61.8% Fibonacci retracement at 2.59. Natural gas is set to close weak, below that Fibonacci retracement level, in the lower quarter of the day’s range, below the internal downtrend line, and below the 34-Day EMA (orange). It is possible today’s test of support of the uptrend line holds and turns the price of natural gas back up, but there is no sign of it yet. Therefore, there is a good chance the retracement will continue.
Drop Below Today’s Low Targets 2.52
A drop below today’s low has natural gas below the uptrend line and heading towards the 78.6% Fibonacci retracement at 2.52. If reached, natural gas would be below last week’s low of 2.54. Nonetheless, with only three more days remaining this week, it could continue to trade inside last week’s range, setting itself up for a potential upside breakout of an inside week next week. So far, that is the case. If natural gas continues to do so support should be seen following a sign of strengthening occurs before natural gas falls below last week’s low.
Watching for Signs of Strength as Today’s Low Sits on Support
Even though there is little sign of it yet, today’s low could be the low of the retracement. The market is recognizing the uptrend line so far, and the low is in a support zone that also includes the intersection of the uptrend and downtrend line (blue arrow) around 2.59. Further, the 61.8% retracement (potential support) is at 2.59. A bounce and subsequent close above 2.59 will show short-term strength that could lead to additional strengthening. Once natural gas is back above 2.59, it will also be above the trend lines.
Rise Above 271 Provides Bullish Indication
Given recent price behavior, a rally above 2.71 is needed for a daily bullish signal. At that point, natural gas will have a shot at trending higher. Keep in mind though, that if it happens this week, last week’s high is at 2.865. Until there is an advance above that high natural gas continues to trade inside last week’s range.
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