Pressure Builds Below the 20-Day Average

Today’s action marks the second consecutive daily close below the 20-Day moving average since August 27, reinforcing signs of weakening momentum. The failure to sustain above this short-term trend line has shifted market sentiment toward sellers, increasing the odds of further tests of downside targets. The overlap of the 61.8% retracement and a 100% projected target from a falling ABCD pattern highlights $2.84 as an especially important level.

Additional Downside Targets Emerging

If $2.84 fails to hold, attention shifts toward a deeper potential support zone around $2.75. This area is reinforced by the 78.6% Fibonacci retracement and a 127.2% extension of the same ABCD pattern, adding to its technical weight. At the same time, a falling trend channel is influencing price behavior. The channel’s midline has acted as a guide for support and resistance in recent swings, suggesting it may once again play a role in this pullback.

Lower Highs Confirm Bearish Tone

Structurally, natural gas has been carving out lower swing highs after stalling near a long-term uptrend line, which previously served as dynamic support. That resistance aligned with the 50-Day moving average, further confirming the zone’s significance. Each rebound has failed near the upper quarter line of the channel, underlining how the broader bearish channel structure is containing price activity.

Weekly Chart Adds Weight to Bearish Case

On the weekly timeframe, natural gas looks set to finish the week in the lower quarter of its range. This comes after a bearish weekly reversal pattern formed last week, which will be confirmed with a close below $2.90. Such confirmation would support the case for a continuation lower, with the $2.75 – $2.76 zone emerging as a strong candidate for the next meaningful test of support but only if the $2.84 area fails first.

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