Natural Gas Price Forecast: Uptrend Support Faces Critical Test

Sellers Test Long-Term Uptrend Support

Sellers took back control of natural gas on Monday, as it dropped to a new retracement low of $3.11. This provides a clearer test of support near a long-term uptrend line that was confirmed during the prior decline. That decline established a higher swing low of $3.01 at the trendline in mid-January. Along with the uptrend line, the January low marks key support for long-term bull trend that began following the 2024 low. Since it is a higher swing low that is part of the trend structure, a failure of that price area could signal further weakening.

200-Day Average Caps Recovery Attempts

Otherwise, support is anticipated above $3.01, that should eventually result in signs of strength and a bullish reversal. Last week, natural gas failed to reclaim the 200-day average while it was tested as resistance over several days. A small bear flag formed, and it trigger to the downside today. Therefore, the 200-average is key near-term resistance. It needs to be reclaimed with a daily close above the average as a sign that buyers have taken back control.

Deep Correction Near Potential Inflection Point

Since natural gas is close to touching the uptrend line and challenging support near the $3.01 low, what happens next may be significant. Nonetheless, as of Monday’s low, the price of natural gas was down by $4.33 or 58.2% from the $7.44 peak from January. That seems like that might be enough to satisfy a correction. It exceeds the prior largest decline since the 2024 lows. That was a 46.5% decline from the March peak at $4.90. An extension of the earlier maximum decline might mean two things. Either, that the drop is overextended to the downside, or that underlying selling pressure is increasing, putting the January low at risk of failure.

Bearish Structure Dominates Below Key Resistance

If today’s high can be reversed, the 200-day average at $3.60 and a lower swing high at the top of the bear flag at $3.66 are key near-term resistance. Until there is a reversal of the lower swing high, bearish structure dominates. If recovered, a bullish reversal is signaled. That would put natural gas in a position to target an interim lower swing high at $4.59 from December and the $5.50 swing high from December.

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