Natural Gas Price Forecast: Demand improves from low of 2.98

Confluence identifies support zone

Given the confluence of indicators pointing to potential support around 3.04-3.02 and the intraday recovery, there is a possibility that today’s low ends the short-term correction. A return to the 3.02 breakout level is typical as previous resistance levels are tested as support. The decisive rally above 3.02, a previous swing high, on November 20 triggered a bullish breakout of a symmetrical triangle pattern.

Once triggered, price rebounded from the next two higher swings forming the top of the triangle formation at 3.16 and 3.39 before peaking at a new trend high at 3.56. The peak value of 2023 is slightly higher at 3.64. This was the highest price traded since January 2023.

The upper boundary of the triangle may still need to be tested

Despite the potential for the 3.02 support zone to remain in place, the upper boundary of the triangle is also slightly lower, around 2.92, depending on when it might be reached. The line also defined the resistance at the top of the triangle. It could still be tested as support. The line is followed by 2.90 and 2.88, the 127.2% extended target for the falling ABCD pattern and the 78.6% retracement level, respectively.

Closing the day above 3.02 wound shows strength

A daily close above 3.02 would provide a small indication of strength to pursue, and even further a close above 3.04. However, a bullish reversal would not be indicated until a rise above today’s low of 3.08 occurs, unless there is a new low for the current bearish retracement beforehand.

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