Natural Gas Price Forecast: Bearish Breakdown Targets Lower Support Levels

Bearish Breakdown Targets Lower Support Levels

Natural gas turned decisively lower on Thursday, breaking through several key potential support zones to reach a 28-day low of $2.99. Downward pressure continues at the time of writing, with trading remaining near the lows of the day. A drop below Wednesday’s low of $3.20 began the selloff, with weakness quickly confirmed by a drop below the interim swing low of $3.12.

Subsequently, the 50-day moving average was tested as support but failed to hold, leading to a bearish trend reversal signal with a decline below the recent higher swing low of $3.02. This sequence of breakdowns suggests that short-term momentum has shifted decisively back toward sellers.

Bearish Structure Expands Beyond Recent Weakness

Thursday’s decisive decline through multiple price levels shows sellers clearly in control. Due to the triggering of multiple reversal signals, sellers may continue to dominate price action in the coming days and weeks. The larger trend context may now play a role, as Thursday’s decline shows the potential continuation of a developing bearish trend structure that began following the January spike high of $7.44.

The recent high of $3.40 is now a lower swing high within that larger bearish trend. A bearish reversal from that high confirmed during Thursday’s decline below $3.16. The bearish signal suggests a potential continuation of the bearish trend, highlighting the April low of $2.50 as a potential downside target, as well as lower price levels if that level is broken to the downside. That represents the larger-picture outlook. In the short-term, a daily close below $3.02 will confirm the bearish trend reversal signal and thereby increase the chance for lower targets to be hit.

Key Support Levels Define the Next Test

A higher swing low from May at $2.86 and the 61.8% Fibonacci retracement level mark the next target zone. Given the strong bearish momentum, as represented by the wide-range red-bodied candlestick pattern, a test of this support area may occur quickly. Further down is another higher swing low at $2.68, providing the next lower target. A failure of both levels would further reinforce the developing bearish structure.

Weekly Support Could Determine the Next Move

The weekly chart shows support being tested near the 20-week moving average, currently near $2.99. It was previously confirmed as support for three consecutive weeks during the initial pullback from the June peak. Since the weekly timeframe suggests this remains an important support area, a bounce could form to test prior support zones as resistance before potentially establishing new corrective lows.

Therefore, while short-term momentum remains bearish, the ability of natural gas to hold the 20-week moving average may determine whether a temporary rebound develops or whether the broader decline resumes.

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