Natural Gas Forecast: Testing Support Levels and Potential Reversal

Natural Gas Forecast Video for 14.07.23 by Bruce Powers

Natural gas is testing prior support at the pullback low of 2.536 from last week. Today’s low was 2.539 at the time of the writing. This indicates that the retracement is probably not over yet. If last week’s low triggers a weekly bearish signal will occur.

Next Lower Support Zone

Nevertheless, there are clear signs of support not much lower. First, is the area of the 50% retracement at 2.507. That level is strengthened by two other indicators pointing to the same spot. The 55-Day EMA is at 2.519 and the 127.2% falling ABCD pattern extension ends at 2.495. Together, this creates a potential support range from 2.507 to 2.495. This is the first test of support of the 55-Day line since natural gas broke above it on June 15. Therefore, that zone around the line has a good chance of seeing buyers’ step in and a subsequent bullish reversal.

If natural gas keeps falling to below 2.495 then it is probably heading to the next range from 2.419 to 2.404. The top number is the 61.8% Fibonacci retracement, and the lower level is the 161.8% extension of a falling ABCD pattern.

Inside Month So Far

On a monthly basis, a bullish reversal triggered in May with a daily close above 2.529. So far, this month is an inside month. Given that we’re almost halfway through the month, July could end as an inside month. If that happens natural gas will set up the potential for an inside month breakout.

Strength Indicated Above 2.666

In the meantime, strength is indicated on a rally above today’s high of 2.666 with confirmation given on a daily close above that high. Subsequently, natural gas heads towards this week’s high at 2.75, followed by the two-week high at 2.793. Once that happens natural gas is ready to proceed to the most recent trend high of 2.878, followed by a potential resistance zone from around 3.00 to 3.03. You can see that the first rally off the bottom in February ended at a high of 3.03.

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