Natural Gas Price Forecast: Downtrend Holds Amid Short-Term Strength

Short-Term Weakness Amid Ongoing Downtrend

Signs of weakening continued for natural gas on Tuesday, as it again confirmed resistance near the 10-day moving average with the day’s high of $2.89. A slightly lower trend low of $2.76 was reached before an intraday bounce, suggesting the possibility of a four-day closing high – a sign of short-term strength – yet remaining within a clear downtrend structure that indicates lower prices ahead.

Trend Lows and Breakdown Confirmation

As noted, the prior trend low of $2.78 was exceeded briefly on Tuesday before recovering to a four-day closing high. Natural gas has been testing the potential for a new trend low since the initial low on February 26. The related decline led to a break below the long-term uptrend line and drop below a higher swing low at $3.01.

Bearish Validation and Structural Pressure

The failure of a bearish continuation at such a key support zone is a warning to be on guard for an unexpected move. Price structure shows a developing downtrend and prior bearish reversal signals for the long-term uptrend. Subsequently, consolidation has been largely contained below the trendline. Recently, the bearish implications were validated as the 50-day moving average fell below the uptrend line, further confirming that sellers are in charge.

Key Pivot and Upside Targets

Nonetheless, the near-term bearish implications would start to shift with a rally above the four-day high of $2.90, indicating a recovery of the 10-day moving average as well. However, the lower interim swing high of $3.06 marks a key short-term pivot, as a rally above that level triggers a bullish reversal of the short-term downtrend. The 50-day moving average, at $3.25 currently, marks the first upside target. After that, there are lower swing highs from $3.27 to $3.32, representing a potential resistance zone.