Natural Gas Price Forecast: Moving Averages Tighten Near Decision Zone

Short-Term Compression Between Key Moving Averages

Natural gas is currently testing resistance near the 20-day moving average and support near the 10-day moving average. The 20-day average is at $2.89 and falling and about to converge with Monday’s high of $2.88. That convergence would add to the potential significance of a recovery of those levels, based on price structure and the trend indicators. On Tuesday it pulled back slightly below the 10-day average, generating a lower daily low at $2.79, but the average was quickly recovered, and natural gas is on track to close the session above the 10-day average and potentially register a nine-day closing high, confirming short-term strength.

Bearish Structure Meets Key Resistance Levels

Nonetheless, bearish price structure dominates, and future strength will be heading into trend resistance near the 50-day moving average (around $2.97) and a downtrend line. An interim lower swing high follows at $3.00. A rise above that level would provide another bull reversal signal and open the door to higher price levels. Specifically, the 100-day moving average is a key high-level target given the current patterns. There is also a lower swing high at $3.19 that presents potentially strong resistance. It is part of the downtrend structure, and a recovery of that level would provide a more significant reversal signal than earlier structure signals.

Trendline Convergence Creates Breakout Window

It is interesting to mention that the downtrend line and dashed uptrend line converge around May 13 and therefore create a window for a breakout through one of those lines. The direction will likely lead to a continuation in that direction. Upside levels are discussed above. Given the confluence of indicators at recent support of $2.72 from last Tuesday, a resolution to the upside could occur even within the larger developing bearish structure. Another rally toward resistance near the 100-day moving average may be what is needed before a sharp continuation of the decline that followed the 2025 peak.

Breakdown Levels and Fibonacci Extension Risk

A bearish continuation signal would trigger on a drop below last week’s low of $2.72, with the first target likely to fail at $2.58 and potentially leading to a deeper retracement. There is a 78.6% Fibonacci retracement near $2.31 and an area of potential support. A larger and potentially more significant lower price zone sits around $2.15 to $1.99. Overall, price action remains caught between near-term moving average compression and a broader bearish trend structure.

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