Natural Gas Price Forecast: Gas Rebounds but Faces Overhead Resistance

Sellers continued to dominate the natural gas market on Wednesday, driving prices to a new trend low of $2.76 before buyers stepped in. The rebound lifted prices to an intraday high of $2.85, marking a shift in tone from Tuesday’s decline. A daily close above the prior trend low of $2.77 would hint at short-term strength and possibly set the stage for a tradable bounce.

Notably, Tuesday’s sell-off completed a 78.6% Fibonacci retracement of the previous upswing, with prices continuing to respect that area as support. By the close, natural gas appeared on track to finish in the upper quarter of the day’s range – a constructive short-term sign.

Support at Channel Low

It may be significant that Wednesday’s low aligned with a lower boundary of a small falling channel, a level that also held during Tuesday’s session. A decisive move above today’s high could prompt a test of prior support levels, which may now serve as resistance. One such area is the anchored volume-weighted average price (AVWAP) line drawn from the 2024 bottom, currently near $2.96. This level coincides with potential resistance around a long-term uptrend line that was recently broken, now at around $3.03.

Resistance Ahead Within a Downtrend

Despite the midweek bounce, the broader technical picture remains bearish. Natural gas confirmed a continuation of its short- and intermediate-term downtrends on Tuesday with a breakdown below the prior swing low at $2.86. While a rebound could develop in the short run, it is expected to face firm resistance within the prevailing downtrend structure. The 20-Day moving average, now at $3.10, represents the most critical dynamic resistance level, and a sustained rally above it would be required to shift sentiment meaningfully.

Lower Targets if Selling Resumes

Should the market turn lower again and break below Wednesday’s $2.76 low, a fresh bearish signal would be triggered. This could set the stage for a decline toward $2.63, completing an initial target for a falling ABCD pattern (purple). Additional potential support sits near the $2.54 level, defined by another 78.6% Fibonacci retracement from a larger prior upswing. Between these levels, a long-term downtrend line may offer interim support as well, but the dominant trend remains to the downside.

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