Natural Gas Price Forecast: Can Bulls Break Above $2.89?

Signs of support were indicated for natural gas on Tuesday, as it triggered a one-day bullish reversal to reach a high of $2.81 at the time of writing. A higher daily low of $2.72 marks short-term support after a bullish doji hammer candlestick pattern that formed on Monday was triggered. Notably, the 20-day moving average at $2.79 was reclaimed, confirming short-term strength. The reversal provides an early indication that buyers are attempting to regain control, although the broader technical structure remains vulnerable to renewed selling pressure.

Natural gas futures daily chart shows one-day bullish reversal below key resistance. Source: TradingView

Bearish Structure Still Dominates

Although Tuesday’s price action was bullish, it is occurring within a four-week bearish consolidation range near recent lows. Support is at the recent low of $2.67, and resistance is at last week’s lower swing high of $2.89. Consolidation has occurred below resistance of an uptrend line that was confirmed as support before it was broken to the downside three weeks ago. Once prior support switches to resistance, the downtrend may be ready to resume. Therefore, the current rebound needs to clear several layers of resistance before it can be considered a meaningful change in trend.

Natural gas futures daily chart shows larger trend structure. Source: TradingView

$2.89 Holds Breakout Key

Also supportive of a bearish resolution from consolidation is last week’s bearish inverted hammer candlestick pattern. That one-week pattern triggered this week on a drop below $2.76. The high of the week generated a lower swing high and a successful test of resistance at the uptrend line. This keeps the bearish structure intact for now, while a failure to hold the 20-day moving average would increase downside risk.

A decisive advance above that swing high at $2.89 would provide a bullish signal and possibly trigger a breakout of consolidation. The first upside target zone would then be the lower swing high of $2.98, which is confirmed by a higher swing low from late May at the same price. However, the 50-day moving average at $2.98 is currently falling and it will soon provide a potential upside target below that lower swing high. A sustained move above $2.89 would strengthen the recovery case, while renewed weakness below $2.72 would put $2.67 back in focus.