Natural Gas Price Forecast: Bearish Pressure Builds Below Key Support

Bearish Pressure Tests Triangle Support

Sellers took control of natural gas on Monday, as it gapped lower to reach a new corrective low of $2.77 for the bearish correction. Trading remained near session lows at the time of writing and could decline further by the end of the session. Notably, the low was a test of support at the lower boundary of a small expanding triangle discussed in recent weeks.

The pattern shows that the recent trading range is expanding, which can reduce the reliability of breakout signals. The top boundary of the consolidation pattern was confirmed by both Thursday and Friday’s highs, as price was clearly rejected from that boundary area.

A Bounce Remains Possible, but Weakness Persists

Until there is a decisive decline below today’s low and through the lower boundary line, support at that boundary could still lead to a bounce. Overall, though, natural gas is showing signs of weakening that suggest an eventual resolution of the consolidation to the downside. In addition to reaching a new trend low on Monday, a key support zone from approximately $2.82 to $2.74 was broken and could be confirmed by a daily close below $2.80.

Any Rally Faces Falling Resistance

If a bounce does follow Monday’s low, the upper range of the expanding triangle becomes a potential target. However, resistance was recently confirmed at a high of $2.98 near the 20-day moving average. That average, at $2.97, is falling and therefore may continue to limit upside potential during any advance. The recent rejection at the 20-day moving average also confirms building bearish momentum, which could accelerate following that rejection.

$2.65 Trend Low Moves into Focus

The next downside target is the 88.6% Fibonacci retracement at $2.74, followed by the recent trend low of $2.65. The bearish signs noted above put that low at risk of eventually being broken. Unless natural gas shows a clear shift in bearish character, the expanding consolidation pattern and weakening price action continue to favor a test of lower levels.

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