Natural Gas Price Forecast: Recovery Setup Builds Above Moving Averages

Key Support Cluster Tests Stability

Natural gas pulled back to a low of $3.10 on Tuesday, as it successfully tested support at the confluence of three levels. The 10-day moving average is at $3.10 and is joined by an uptrend line and prior structural resistance (now acting as support). During the decline, the 100-day moving average initially failed before an intraday recovery. It looks likely that natural gas will close the session above the 100-day moving average. If it does, the potential for further upside is retained, with increased momentum.

Trend Structure Holds Despite Pullback

Retaining support at the 10-day moving average shows the short-term bullish trend remains intact. It also adds to the significance of that average should price test it again, as a break below it would be a sign of a weakening trend. Although the 200-day moving average was successfully tested as resistance during Monday’s advance, which reached a high of $3.40, the day ended with a decisively bearish engulfing pattern. If a bullish hammer candlestick pattern forms for Tuesday, that would set the stage for a daily reversal off key short-term support.

Resistance Pathway Above $3.23

If strength returns, another test of resistance near the 200-day moving average at $3.41 is possible, along with a continuation to a zone around the long-term uptrend line and a lower swing high from March at $3.49, which is also the top of a falling wedge pattern. Nonetheless, a decisive breakout above Tuesday’s high of $3.23 would need to signal first while also confirming that the 100-day moving average has been retained as dynamic support. It is also possible that upward movement occurs without a recovery above this week’s high of $3.40.

Broader Trend Pressure Still Intact

Once the current advance hits solid resistance, the trend is anticipated to turn back down as prior support represented by the uptrend line will have switched to resistance. That may put natural gas in a technical position to continue to weaken as a progression of the long-term bearish signal that initially triggered with a decline below the uptrend line in mid-February.

Downside Levels Define Risk Structure

Near-term support is clear at Monday’s low of $3.10 and the 10-day moving average. If broken, the 20-day moving average at $2.98 becomes a target, followed by a zone from around $2.86 to $2.84. That lower zone consists of a higher swing low and the 50-day moving average, respectively.

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