Natural Gas Price Forecast: Breakout Build Toward Higher Targets

Consolidation Near Key Moving Average

Natural gas continues to take its time reclaiming the 50-day moving average, as it continued to test resistance near that average on Wednesday. Price consolidated as it stayed within the range from Tuesday. However, the 10-day moving average was again confirmed as support, which shows short-term momentum remaining strong. For the past few days trading has occurred both above and below the 50-day line, now near $2.85. But Tuesday’s high near $2.95 is the top of the short-term advance and therefore represents key near-term resistance.

Support Structure Strengthens Short-Term Trend

Holding support near the 10-day average shows recent strengthening and therefore the potential for natural gas to decisively reclaim the 50-day moving average. That would show a change of character as buyers take firmer control. Based on Fibonacci analysis, the first upside target would be the 61.8% Fibonacci retracement at $3.12, followed by the 78.6% retracement of the prior internal downswing, at $3.28. The 20-day moving average was successfully tested as support last Thursday, resulting in a higher swing low at $2.68. That is key structure support, along with the 20-day moving average.

Bullish Wedge Breakout in Progress

Natural gas is following through on an upside breakout of a falling bullish wedge reversal pattern triggered two weeks ago. A first minor pullback following that breakout led to the $2.68 low. Once a prior resistance zone is shown as support the bull trend is ready to proceed. A new minor trend high was reached on Monday, followed by a minor pullback to support near the 10-day moving average.

Broader Trend Pressure Points Ahead

The larger dynamic at play is a pullback to the upside to test prior dynamic support, as represented by the long-term uptrend line and 200-day moving average, now at $3.41 and falling. A little lower is the other long-term trend indicator, the 100-day moving average. It is now at $3.26 and represents another potential resistance zone.

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