Natural Gas Price Forecast: 50-Day Average Breaks – 200-Day $3.58 Magnet

Monday’s Confirmed Breakdown

Natural gas dropped through a key potential support zone represented by the 50-day moving average on Monday. The breakdown looks likely to confirm with a daily close below Friday’s low at $4.07 and the 50-day average at $4.08. At writing, price has already printed a lower daily high of $4.22 and low of $3.99, with sellers firmly in charge and further weakness possible before the close.

Next Downside Targets

A daily close at new retracement lows brings the 61.8% Fibonacci retracement at $3.89 directly into play. More importantly, a confirmed 50-day average breakdown signals a trend change and targets the lower end of the rising channel, where the 200-day average has recently converged with the channel uptrend line to mark a similar price area as potential support.

200-Day Confluence Significance

The zone around the 200-day average at $3.58 carries enhanced weight from a horizontal level that previously acted as key support and resistance—specifically the October 2023 lower swing high and the recent October higher swing high that met resistance nearby. The current decline represents the first test of support near the 200-day line since its reclaim, and the confluence could act like a magnet drawing price lower before the bearish correction exhausts itself.

Overbought Reversal Context

The sharp advance from October’s higher swing low ended abruptly last Monday on a decisive bearish reversal day. The relative strength index entered overbought territory, and the subsequent decline triggered a double top on the indicator. The breakout day also exceeded the distance of two rising trend channels, another classic overbought signal. The ongoing swing back toward the averages now appears in full process following the failure of that bull channel breakout.

Outlook

Natural gas has shifted decisively bearish with the 50-day average breakdown opening the path to $3.89 initially and the powerful 200-day/channel/horizontal confluence near $3.58 as the probable correction terminus. A close below $4.07–$4.08 locks in the trend change; only a rapid reclaim of the 50-day would begin to challenge the current downside momentum.

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