Natural Gas Price Forecast: Bounce Faces Broader Downtrend Forces

Recovery Bounce Meets Key Resistance

Natural gas bounced on Monday, triggering a one-day bullish reversal and a successful test of resistance near the 10-day moving average. A high of $2.81 was reached during the session before sellers took back control and drove prices back down intraday. The one-day bullish signal will be confirmed on a daily close above Friday’s high of $2.74, while a higher daily high and higher low were established.

Although the 10-day average seems to have been recognized by the market, its current significance as a potential resistance zone is less than that of the 20-day moving average, now near $2.85. This places natural gas in a short-term recovery attempt within a bearish structure.

20-Day Resistance Reinforces Broader Weakness

The 20-day moving average was successfully tested as resistance during the most recent minor upswing that established a lower swing high near $2.91 last week. Sellers took back control following that high, leading to a new bearish continuation signal below $2.72. That shift reinforced the broader weakness that has defined recent trading activity.

Bearish Structure Still in Control

Although there are signs pointing to a possible continuation of the bearish trend that followed the December peak, a drop below the swing low at $2.58 from early January is needed for the next continuation signal of that larger trend. There is also an established downtrend that developed after the lower swing high near $4.09 from late January. Weakness has continued to drive price action, resulting in a break below an interim rising trendline on Friday.

Wedge Formation vs. Trend Pressure

Monday’s price action generated a possible swing low that anchors a lower boundary line for a potential falling bullish wedge pattern. This does not mean it will remain valid or trigger with an upside breakout, but traders should be aware of its formation in case it does. There are two key price levels that can be used for potential breakout signals. The first is the 20-day moving average near $2.85, and the second is the lower swing high near $2.91.

Nevertheless, the larger bearish trend remains dominant unless there are clear bullish signals. As with the early-session bounce that opened Monday’s trade, the next move will depend on whether buyers can overcome nearby resistance and shift the broader structure away from persistent downside pressure.

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