Natural Gas Price Forecast: Key Support Faces Critical Test

Testing Short-Term Support and Resistance

Natural gas tested support near a short-term trendline again on Monday, reaching a low of $2.85 for the day. This is very close to the prior trend low of $2.78 reached in late February and therefore puts it at risk of being broken, which could trigger a continuation of the developing downtrend that began following a peak in January at $7.44. The day’s high of $3.06 retested resistance near the 20-day moving average, confirming it as a key near-term resistance level, which resulted in strong selling that led to a drop below the prior short-term trend low at $2.86 from last week.

Resistance Areas and Downward Bias

Short-term resistance is clear at $3.06. A rally above that level will also reclaim the 20-day average and the short-term downtrend line. However, natural gas would be rising into potential resistance areas and would likely retain a downward bias unless the 200-day moving average, now at $3.52, is reclaimed. A long-term rising trendline marks potential resistance, since it previously failed as support in February.

Structural Risk and Trend Reversal Signals

The significance of the $2.78 trend low is enhanced by the August swing low at $2.62. If $2.78 is broken, then a break of the prior higher swing low from August is more likely, thereby triggering a reversal of the long-term rising trend. That would be the second trend reversal signal from price structure, following the failure of the higher swing low in January at $3.01. If confirmed by a daily close below that level and followed by additional signs of weakness, the next support zone, based on structure alone, is indicated near the higher swing low at $2.21 from October 2024.

Potential Support from Long-Term Bullish Wedge

Regardless of the potential downside, there is also the possibility that a new trend low leads to support near a falling trendline that originates from the March 2025 high. It represents the top boundary of a large bullish wedge, where prior resistance could be successfully tested as support, and this will be important to monitor.

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