Natural Gas Price Forecast: Bearish Momentum Continues to Dominate

Natural gas continued to weaken on Wednesday as it fell to a new retracement low of $3.20 and retested potential support at the 88.6% retracement level. Trading continues to be dominated by sellers in the lower half of the day’s trading ranges, at the time of this writing. If weakness continues into the close, natural gas looks likely to end the day at its lowest weekly closing price for the current decline. That would be a bearish sign, but further confirmation is needed.

Holding Potential Support Zone

Although a minor bearish trend continuation signal triggered today, there remains a possibility that support around the 88.6% retracement at $3.21 could hold. Notice that the lower end (25% extended) of a descending trend channel (blue lines) is nearby, and it represents an area of potential support as well. That would change on a decisive drop below today’s low. Notice that today’s high found resistance at the bottom of a lower channel line, in blue. Since that line was previously identifying support, today’s price action recognized it as resistance. This is a bearish sign as a downtrend typically progresses in this manner.

Rally Above $3.32 Could Change Bearish Outlook

A one-day bullish reversal above today’s high of $3.32 may start to change the near-term bearish outlook if it leads to a daily close above that price level. Otherwise, a decline below today’s low signals another continuation signal and improves the chance that the next lower potential support zone is tested. It starts with the completion of a falling ABCD pattern at $3.08. That is where the change in price in the two downswings of the current correction match. Once there is a match, a potential pivot level is identified, in this case support.

200-Day Moving Average Target

The 200-Day MA is slightly below that target at $3.06 and is rising. Therefore, it could converge with the ABCD pattern target upon approach. Since the 200-Day MA is a long-term trend indicator, it takes priority over the pattern target. But if the two indicators identify the same or a very similar price level, that price level gains in significance. Since the 200-Day MA hasn’t been approached as support since October 2024, it should do so if touched soon. Bearish momentum has dominated since the lower swing high (C), so natural gas would be approaching that potential support area potentially near the end of the trend.

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