Natural Gas Price Forecast: Bearish Momentum Builds Below Key Support

Breakdown Confirms Shift in Trend Structure

A new bearish trend reversal signal was confirmed in natural gas following a daily close below the higher swing low from August on Tuesday. That swing low at $2.62 was part of the bullish trend structure and it has now been violated, providing added significance to the developing downtrend as it shows sellers remain in control. The bearish continuation unfolded on Tuesday and then during Wednesday’s session natural gas consolidated within Tuesday’s range and largely below $2.62, further indicating persistent downward pressure.

Momentum Pressure Meets Near-Term Resistance

However, natural gas has been falling steadily since the last confirmation of resistance at the 20-day moving average on March 30. Given the continuation of bearish momentum, the 10-day moving average now provides the closest dynamic trend resistance indicator at $2.71. Based on price structure, a rally above Friday’s high of $2.72 would be a clear sign of short-term strength that could lead to a bounce into resistance within the context of the broader downswing.

The falling 20-day moving average, now at $2.86, provides the more significant trend resistance indicator, especially since the decline became more distinct following the last test of resistance at that average. It also aligns closely with the short downtrend line, reinforcing a confluence of resistance.

Testing Support Within a Broader Downtrend

Despite the recent bearish signal, natural gas has reached an area of potential support defined by a downtrend line that connects to the June 2025 swing high. That line has defined support a couple of times recently, in mid-January and late-February, and it could do so again, particularly since bearish momentum accelerated after the $3.15 lower swing high established in early March.

Measured Move Signals Possible Pivot Zone

There is also a measured move target that has now been reached, as the current downswing has seen price drop by 26.7% and the prior downswing was a decline of 24.2%. Once there is symmetry in price between sequential swings in the same direction, a potential pivot zone can be identified.

Wedge Formation Points to Imminent Breakout Window

When considering that longer trendline along with the short downtrend line, a potential bullish wedge (purple outline) formation emerges. This doesn’t mean it will be confirmed with an upside breakout, but it remains a valid possibility if the pattern retains its integrity, defined by its boundary lines. Since the two boundary lines of the pattern are projected to intersect around May 4, an upside breakout through one of the lines will likely occur prior to that timeframe.

Downside Risk Remains in Focus

If there is a bearish continuation to the downside on a decisive drop below Tuesday’s low of $2.56, then the next lower potential support zone that stands out from prior price action is from $2.26 to $2.21.

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