Natural Gas Price Forecast: Struggles Near Key Support Levels

Natural gas traded within Monday’s price range on Tuesday as it consolidated within a relatively narrow range. For the second day in a row the high for the day found resistance around a rising trendline (lower channel line) that previously marked dynamic support, a weakening sign. Moreover, the 200-Day MA, now at $3.42, continues to be tested as a support zone along with the 61.8% Fibonacci retracement level at $3.36.

Selling pressure remains, which can be seen in the positioning of the candle bodies (open to close) relative to the 200-Day MA. The candle body for today and Monday were fully below the 200-Day line for the first time since late-April. At the time of this writing, the high for the day was $3.47 and the low $3.35.

Challenging Channel Support

If natural gas retains a pattern of higher swing lows, the uptrend has a chance of being sustained. Although a lower rising channel line has failed to retain support, there is a longer trendline slightly below Monday’s low of $3.28. A failure of support at the lower trendline opens the door to a 78.6% retracement target of $3.13 and an initial target for a falling ABCD pattern at $2.97. That price area may have some significance as it is also marked by an AVWAP price level at $2.95 currently.

The indicator is anchored at the February 2024 trend low, so it has long-term significance. However, it was also confirmed twice as support. Recently, the swing low in April found support at the AVWAP line (light blue) and earlier in October 2024. Since the ABCD target and AVWAP indicators point to a similar potential support area, it could act as a magnet for price.

Above $3.47 Gets Buyers Interested

On the upside, a two-day bullish reversal will trigger on a rally above Monday’s high of $3.47. An interim lower swing high is the first target at $3.57. It is followed by a lower swing high at $3.75. A sustained advance above $3.75 is needed before natural gas shows strength that could lead to a challenge of recent trend highs at $4.15.

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