Natural Gas Price Forecast: Bullish Reversal Potential Meets Key Resistance

Rally Loses Momentum at Key Resistance

Natural gas initially extended gains on Wednesday, testing a key resistance target with a high of $3.40, before sellers took control and pushed prices lower. At the time of writing, trading continues near the lows of the session, currently $3.19. This creates the potential for a bearish shooting star candlestick pattern, which would not be confirmed unless prices break below Wednesday’s low.

As of Wednesday’s high, natural gas had risen around 20% from the recent swing low of $2.83. The current upswing was the largest advance of the prior advance since the March 2026 peak at $3.49. This suggests improving underlying demand and strengthens the larger potential bullish pattern. However, in the short term, a pullback to test support may follow before another attempt to extend the advance that followed the recent low of $2.50 in October.

Rectangle Pattern Holds Larger Bullish Potential

Resistance was seen at the lower swing high of $3.40 from early June, which marks the top boundary of a large rectangle pattern that has formed since the April low. Since the consolidation pattern occurs near trend lows, relative to the January peak of $7.44, it suggests the possibility of a bullish reversal signal on a decisive rally above $3.49. That would signal a breakout of the rectangle and provide additional confirmation of a potential bullish reversal, putting natural gas in a strong position to challenge higher resistance targets.

Fibonacci Support Levels Define Pullback Risk

Consequently, a decline below Wednesday’s low will signal a pullback from key resistance. If underlying demand remains strong, the pullback should be relatively shallow. Key levels to watch for support start with the 38.2% Fibonacci retracement of the prior advance at $3.18, followed by a 50% retracement at $3.11. However, unless the 50% level is tested in the next few days, a break below the rising trendline at the lower boundary of the trend channel would need to be broken to reach the 50% retracement level.

Trendline Test Determines Next Direction

Therefore, the magnitude of the current pullback and subsequent recovery are important in determining what happens next in the bigger picture. A decisive decline below the trendline could result in a failure of the developing bullish structure and provide another bearish signal. Otherwise, once support is established and followed by another advance, it could result in a bullish reversal signal against the long-term decline on a breakout above $3.40.

Higher Targets Await Breakout Confirmation

Some of the more obvious upside targets begin with $3.49, $3.56, and $4.15. Since $4.15 is below a long-term rising trendline, it would seem to have a reasonable possibility of being tested following a confirmed breakout. For now, Wednesday’s rejection at $3.40 makes the coming pullback important, but the larger bullish opportunity remains intact as long as key support holds.

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