Natural Gas Price Forecast: Key Support Holds Near $2.87

Support at Key Fibonacci Level

Natural gas is holding support near a 78.6% Fibonacci retracement level and the neckline of a small double bottom pattern. The retracement low for the continuous contract with April is at $2.87. That low followed a rejection of price at the $4.08 swing high, which coincided with the 61.8% Fibonacci retracement of the prior decline. This shows natural gas recognizing Fibonacci levels and therefore the current low has potential significance.

Bull Hammer Reversal and Short-Term Risk

On Thursday, a bull hammer candle reversal triggered above Wednesday’s high of $2.96. Confirmation requires a close above that level, which may not occur if natural gas closes near the day’s low. Thursday’s session also saw a higher daily high of $3.01 and a higher daily low of $2.93. While the hammer pattern suggests possible support, failure to close higher would weaken the breakout signal. Nonetheless, signs of support near a key lower Fibonacci retracement level, provides evidence that support may be sustained near the low.

Broadening Formation and Price Discovery

The dashed lines on the chart outline a large broadening formation, where price ranges expand rather than contract. This structure can generate false breakout signals in either direction, requiring caution.

Potential Support and Bullish Reversal Targets

The 78.6% price zone is a logical support area. A drop below $2.87 would signal failure, shifting the focus to the next support zone at the confluence of the 88.6% Fibonacci retracement and a prior swing low at $2.75-$2.74. for a sustainable bullish reversal, the recent lower swing high of $3.19 must be recovered, followed by a more significant swing high at $3.45, which aligns with historical support and resistance over the past year.

If you’d like to know more about how to trade natural gas, please visit our educational area.