Natural Gas Price Forecast: Faces Reversal Risk After Testing Key Resistance

Natural Gas Hits New High Before Pullback Signals

Natural gas extended its rally on Wednesday, setting a new high at $3.59 before sellers pushed the market lower. The session left behind a higher low at $3.41, which now marks near-term support. By late trade, prices remained in the lower third of the daily range, positioning natural gas to potentially end with a bearish shooting star candlestick — a short-term reversal pattern if confirmed with follow-through below the day’s low.

Resistance Holds at the 200-Day Average

Early strength briefly reclaimed the 200-Day moving average at $3.49, a level often viewed as a barometer of the long-term trend. However, momentum quickly faded, and prices slipped back under the line, reinforcing its role as resistance. This marks the first test of the 200-Day average since it was broken in late July, making rejection at this level an expected outcome. Compounding the technical weight, the zone also coincides with a 127.2% Fibonacci projection from a rising ABCD pattern and the upper boundary of a falling trend channel.

Channel Top and Overhead Resistance Converge

The downtrend line forming the top of the falling parallel channel has added significance as resistance. Price behavior near the top of such a structure often signals exhaustion, and Wednesday’s rejection fits that pattern. Short-term order imbalances are also apparent, with a gap left on the chart that would fill lower at $2.97. Nearby, potential dynamic support comes in at the 20-Day moving average at $3.07, followed by the 50-Day average at $2.98.

Pullback May Prove Constructive

While natural gas has shown impressive resilience over the past several weeks, the advance into such a confluence of resistance raises the risk of a pause or retracement. A decisive break below Wednesday’s low would provide the first bearish signal of the current leg higher. A pullback toward $3.07 or even $2.98 would be considered a healthy correction, providing the trend an opportunity to reset before another potential push higher.

Outlook

If resistance at the channel top holds, the near-term rally may be complete. The strength or weakness of the coming correction will likely set the tone for whether natural gas resumes its upward march or remains capped beneath the 200-Day line.

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