Natural Gas Price Forecast: Faces Key Test at 200-Day Moving Average

Natural gas reached a new retracement low of $3.28 earlier in Monday’s session before buyers took back control. A sharp rally followed to a high of $3.47. That put natural gas in a positive position for the day and reclaimed the 200-Day MA, currently at $3.41. The 200-Day line failed to hold as support earlier in the session and a quick recovery is bullish, if the day closes above it.

However, the day’s high was a successful test of resistance at an uptrend line, which previously marked dynamic support. That could indicate that short-term downward pressure remains. A daily close above the 200-Day MA would be needed to confirm the bullish implications of an intraday reclaim of the 200-Day line.

Key – 200-Day Line

Although the relationship to the 200-Day MA carries more weight than the trendline, it is not yet clear whether today’s low will be established as a swing low. The low for the day was very close to the next lower trendline. It looks like that line may continue to take precedence over the rising line that recently crossed above the 200-Day MA and was shown as resistance today. This might mean there could be two or a few days of consolidation around the confluence of the next lower uptrend line, the 61.8% Fibonacci retracement at $3.51, and the 200-Day MA.

Relative Price Pattern

The relationship of the price of natural gas to the 200-Day MA is going to be key for finding clues in price behavior. If the 200-Day line fails to hold as a dynamic trend support area, then that would indicate that sellers dominate and therefore additional downside in prices could follow. The first sign of relative weaking would be on a daily closing price below the 200-Day MA, and that could happen today. At the time of this writing, trading has been occurring around the line could end Monday’s session either above or below the line.

Support at Risk but Holds Steady

Since October 2024 there have been only two instances where there was a daily closing price below the 200-Day MA. There were five days in April and then one day in May. In other words, natural gas remains in a support zone that could expand a little on the downside yet retain underlying buying pressure. A decisive daily close above the 200-Day line would show interest from buyers increasing. That would be for the short-term only, however, and further signs of strength would be needed to support a sustainable bullish reversal.

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