Natural Gas Price Forecast: Wedge Breakout Targets Higher Levels

Contract Roll and Initial Breakout Signal

Natural gas futures rolled to the June contract, triggering an upside breakout of a falling wedge pattern (purple). A high of $2.74 was reached following a reclaim of the 20-day moving average at $2.69, which is currently in focus. This was an early sign of a potential short-term bullish reversal of the falling wedge pattern, with confirmation still required on a daily close above the 20-day average. However, the interim lower swing high at $2.76 provides a more reliable bullish signal as it is based on structural price behavior.

Key Upside Target Cluster and Long-Term Structure

If the bull wedge breakout is sustained, the potential upside looks to be around the 200-day moving average. The most recent failure of support at the 200-day moving average was February 2. That decline was followed by a quick pullback to test it as resistance and then a larger swing back successfully tested resistance near the 200-day line in March. It takes on added significance as the 100-day moving average is currently converging with it.

Plus, the 200-day moving average is near the lower swing high of $3.49 from March. That swing high marks the beginning of the wedge formation and therefore is a minimum objective based only on the pattern. Together, this convergence of long-term indicators strengthens the importance of the $3.49 region as a key upside reference point if momentum continues.

Near-Term Resistance Zone in Focus

First, however, is potential trend resistance near the 50-day moving average at $2.89 and falling. The 50-day average was broken to the downside on January 28, and it was only subsequently tested once as resistance during the March advance. Potential bullish momentum following the wedge breakout suggests the potential for a reclaim of the 50-day average. But resistance should be anticipated first, unless signs of a decisive reclaim occur, particularly on expanding momentum or sustained closes above short-term resistance levels.

Support Levels Define Immediate Bias

Short-term support is seen near the 10-day moving average at $2.64 and if natural gas stays above that average, the immediate bias remains bullish. If the $2.76 swing high is recovered, the 20-day moving average takes that bullish position, marking key near-term dynamic support. Overall, the structure remains cautiously constructive following the wedge breakout, with confirmation levels above and support levels below, now defining the next directional move, which so far is looking up.

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