Natural Gas Price Forecast: Breakout Tests Key Resistance Zones

Wedge Breakout Momentum Meets Resistance

Natural gas rallied into a resistance zone marked by the 50-day moving average, with Monday’s high of $2.88. That was a 19-day high and a continuation of the expected bullish reversal following the falling wedge breakout signal. Short-term momentum is now being reinforced by the 10- day moving average crossing above the 20-day moving average, confirming an improving near-term trend structure. A downtrend line was broken last week, along with the recovery of those two moving averages, further supporting the shift from bearish to short-term bullish momentum.

Higher-Timeframe Pressure Still Intact

If natural gas can break above and hold above the 50-day average, it has a chance to test higher price zones. Nonetheless, it faces overhead resistance given the developing larger bearish pattern. In February, a long-term uptrend line was broken. That was quickly followed by a structure reversal signal with a drop below the higher swing low of $3.01 from January, confirming a broader transition in the higher-timeframe trend.

 Upside Targets and Key Reference Levels

The falling wedge breakout provides the first real pullback to test prior trend support as resistance. This means that the initial upside target for the current advance would be near the uptrend line that connects to the August swing low. That target zone gains credibility if it is closer to the 200-day moving average, now at $3.42. Notice that during the prior two upswings on the daily chart, resistance was seen near the 200-day moving average. Therefore, it is expected to again show resistance, particularly given the increased significance of the current upswing relative to the prior two, should price reach that level.

Pullback Risk Within Ongoing Advance

Given initial signs of resistance near the 50-day moving average, a short-term pullback may develop from current levels. The 20-day moving average is developing as a key near-term dynamic trend indicator if a rally gets going. It represents potential support near $2.68. A pullback before another breakout attempt of the 50-day average could ultimately improve the probability of a more sustained breakout on a subsequent attempt, as momentum consolidates before continuation.