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Natural Gas Price Forecast: Will Bullish Momentum Continue or Retrace?

By:
Bruce Powers
Published: Jun 12, 2024, 20:25 GMT+00:00

Natural gas traded inside day after a strong Tuesday close, with current high at 3.13 and low at 2.995, testing 78.6% Fibonacci support.

In this article:

Natural gas traded inside day on Wednesday following a strong close on Tuesday. At the time of this writing the high for the day was 3.13 and the low 2.995. Support for the day was seen on a test of the 78.6% Fibonacci level. Although Wednesday’s trading retraced much of Tuesday’s advance, support was indicated at a price level previously identified as possible resistance. Of course, what happens next could further confirm bullish momentum or point to a possible rest period that may include a retracement to test previous resistance areas.

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Weekly Chart Reflects Strength, So Far

Let’s consider the weekly chart for a moment. This week is only the second week of a sharp advance following the breakout of a bull pennant and the long-term downtrend line. Also, the prior trend high was exceeded. If bullish momentum can hold, a third strong week in a row is possible. Particularly, given the reaction of natural gas following the breakouts. A retracement or consolidation will occur at some point. But if the close for the week is in the upper third of the week’s range, the market would be leaning more towards the continuation possibility. The weekly pattern may take on greater significance relative to what happens next.

Breakout of Today’s Range Points the Way

An upside breakout above today’s high may lead to a continuation of the trend on a rise above 3.16. A bullish breakout that closes above today’s high would put natural gas in a good position to end the week strong. It would be in a bullish position heading into the new week. However, the alternative scenario, a breakdown below today’s low, followed by a close below it, points to a retracement, possibly down to the breakout lines.

The prior trend high is at 2.92, followed by 2.84, which is where two trendlines cross. A decline below 2.92 would also be a drop below a trend line. That would be a sign of weakness. But it would matter which line was broken as the uptrend defines support of a shorter trend than the long-term downtrend line. That line starts from the 2023 peak.

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About the Author

Bruce boasts over 20 years in financial markets, holding senior roles such as Head of Trading Strategy at Relentless 13 Capital and Corporate Advisor at Chronos Futures. A CMT® charter holder and MBA in Finance, he's a renowned analyst and media figure, appearing on 150+ TV business shows.

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