Natural Gas Price Forecast: Bulls Challenge Major Moving Averages

Volatility Surge from Contract Roll

Natural gas triggered a one-day bullish reversal on Wednesday, reaching a new rally high of $3.15 and successfully testing resistance near the 100-day moving average. The advance occurred during the front-month contract rollover, a factor that contributed to elevated volatility. The recent pullback tested support near the 20-day moving average on Tuesday for the second time since it was reclaimed in late April. Also, the 50-day average was nearby, further validating the support zone as a layered confluence area.

First Major Retest of Broken Trend

This was the first time since the 100-day moving average broke in early-February that it has been tested as resistance. It represents a key resistance zone that needs to be reclaimed before natural gas has a chance at testing higher potential targets. Since this is the first test of the 100-day average as resistance, the expectation is that resistance will be seen, at least initially, with sellers likely defending this area on the first attempt.

Short-Term Momentum Shift Improves

However, the successful test of support at key moving averages, the 20-day and 50-day, shows improving bullish momentum in the shorter-term. Further, additional evidence of strengthening short-term structure was provided by the recent 20-day average crossing above the 50-day average. This, along with Wednesday’s bullish price action, suggests that the 100-day average may be reclaimed if support continues to hold above the two shorter-term moving averages in the sessions ahead.

Breakout Path Toward Higher Retracements

A decisive advance above Wednesday’s high of $3.15 triggers a continuation of a rally that began on a breakout of a falling bullish wedge consolidation pattern earlier in the move. An initial target near the 61.8% Fibonacci retracement at $3.12 was reached. Once that level is exceeded and the trend shows signs of continuing, the 78.6% Fibonacci retracement becomes a potential target near $3.28. That area matches a resistance zone from March as well, reinforcing it as a high-probability technical inflection point.

Multi-Timeframe Resistance Cluster Forms

Notably, the weekly chart confirms the current resistance zone as it matches the resistance area near the 20-week moving average. This adds to the significance of the zone and therefore the upside extension, if it occurs. Moreover, the 100-week moving average represents potential resistance and it is near $3.27. That puts it aligned with the 78.6% retracement zone, further strengthening the case for this area as a major multi-timeframe resistance cluster.