Natural Gas Price Forecast: Wedge Breakout Faces Critical Support Test

Breakout Falters After Early Strength

Natural gas struggles following a recent upside breakout from a falling bullish wedge last week. Upside follow-through occurred on Monday to a 19-day high of $3.49, before sellers took back control. The result was a failed continuation of the bullish breakout as the day ended at the low of the day and at potential support shown by the 20-day moving average at $3.03. Weakness continued Tuesday, with a slightly lower daily low of $2.96 being established at the 10-day moving average. The 10-day average also marked support on Friday with the day’s low of $2.95.

 Support Levels Now in Focus

The pullback from $3.94 could represent the first pullback following the upside breakout of a falling bullish wedge, before another advance begins, or weakness may continue, resulting in a failure of the wedge pattern. Friday’s high is a key near-term support level, while the recent higher swing low at $2.89 provides a second key support level. If that higher swing low fails as support, selling pressure could begin to amplify given the potential long-term bearish implications.

More specifically, the recent low of $2.78 marks a significant potential support zone. If it fails to hold, then a bearish reversal trigger below $3.01 from February may again exert influence on price behavior. A failure of support at the long-term uptrend line and a higher swing low at $3.01 in February previously showed bearish sentiment increasing.

Resistance Cluster Above

If the area around the 10-day and 20-day moving averages is retained as support, then a breakout above today’s high of $3.15 would provide the next sign of strength. That could lead to another test of resistance near Monday’s high and up to the 200-day moving average at $3.56. The 50-day average has converged with the 200-day and therefore increases the significance of the $3.56 price zone as resistance. Those averages, along with the lower swing high and top of the falling wedge at $3.66, provide a key resistance barrier to higher prices.

Bounce Potential After Deep Correction

The potential for a bounce remains given the bullish wedge pattern and the degree of bearish correction that has already occurred. Natural gas corrected by 62.6% from its $7.44 peak in January, as of the February 26 low at $2.78. That was the largest bearish correction since the 2024 bottom. Prior larger downswings were 46.5% and 40.7%, respectively. Whether natural gas stabilizes near current support or breaks lower from the recent wedge breakout will therefore determine if the pattern introduced at the beginning of the analysis ultimately leads to renewed upside momentum or confirms continued bearish pressure.

If you’d like to know more about how commodity markets work, please visit our educational area.