Natural Gas Price Forecast: Faces New Lows Amid Bearish Retracement

The bearish retracement in natural gas continued Monday with a fall to a new trend low of 1.88. An intraday bounce followed but natural gas remains at risk of testing lower price levels. Today’s decline dropped below the 1.92 bottom of a support zone.

Notice that on Friday support was found at 1.92, the low of the day, followed by a bounce. At the day’s low the price of natural gas was down by 1.28 points or 40.2% from the most recent swing high at 3.16 (A). This is the second largest correction since March 2023 swing high. This factor by itself is enough to indicate that the decline is getting close to bottoming.

Lower Down is 1.85 to 1.80 Support Zone

Given that the next identified potential support zone is lower down from around 1.85 to 1.80, it seems likely that natural gas may at least touch the support zone before bottoming. The support zone begins at the completion of a gap fill at 1.85 and is followed by the completion of a falling ABCD pattern at 1.83. That is where the CD leg of the downtrend is extended by 200% of the price change in the AB leg of the pattern. The lower price level is the middle of the symmetrical triangle bottoming pattern.

Regardless of the potential to test the lower support zone, a signal is needed. A drop below today’s low triggers a bearish continuation of the retracement. How natural gas reacts upon encountering the support zone should be telling and provide clues as to what is next.

Bounce Indicated Above 1.97

Alternatively, today was the third day of lower daily highs and lower daily lows. If there is a rally above today’s high of 1.97, natural gas is indicating a likely bounce is coming. The 20-Day MA is now at 2.13 and the most recent swing high of is close by at 2.15. If natural gas can rise above each of those price levels a bullish reversal will be confirmed. That swing high is also the weekly high from last week. Lower price levels to watch for resistance include the prior swing high at 2.00. Keep in mind though, that a bounce from current levels is taking place within a clear downtrend.

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