Natural Gas Price Forecast: Breaks Support as Sellers Regain Control

Sellers Regain Control

Natural gas took a decisive turn to the downside on Thursday, falling sharply through potential support levels as sellers firmly regained control. At the time of writing, prices are holding near the day’s low of $2.95, with the session likely to close near the bottom of the range. The breakdown reflects renewed bearish momentum and the possibility of a deeper correction ahead.

Key Averages Broken

The decline began with a one-day bearish reversal triggered on a drop below Wednesday’s low, signaling early weakness. That move also sliced through both the 50-Day and 20-Day moving averages. With the 20-Day line at $2.96 it looks likely the session may close there, given the breakdown greater significance. A confirmed close beneath the average increases the likelihood of continued downside pressure.

Swing Low at Risk

Thursday’s selling brings price back to test support around Tuesday’s swing low of $2.87. However, the setup is weakening, as Wednesday’s advance left behind a lower swing high, tilting the bias more clearly in favor of sellers. This structure raises the probability of a falling ABCD pattern completing before any recovery begins.

Bearish Structure Developing

Resistance at the past two swing highs aligns with a long-term uptrend line connected to the April 2024 swing low. Failure to hold that line opens the door for a broader correction, potentially extending beyond the August swing low. With successive lower highs now in place, bearish momentum is building and undermining recent bullish attempts.

Targets Ahead

The completion of the ABCD measured move projects a potential pivot at $2.84, a level that gains added weight from the 61.8% Fibonacci retracement at the same price. This confluence suggests a likely magnet for price in the near term. Should that support fail, the next downside target emerges near $2.75 at the 78.6% retracement level. Despite the potential for a bearish continuation of the larger declining trend channel, another advance towards the top of the channel remains possible eventually if natural gas can stay above the mid-line of the pattern.

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