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5
12, 2024
Natural Gas Price Forecast: Demand Improves Following 2.98 Low
Confluence Identifies Support Zone
Given the confluence of indicators pointing to potential support around 3.04 to 3.02 and the intraday recovery, there is a chance that today’s low ends the short-term correction. A return to the breakout level of 3.02 is typical as prior resistance levels are tested as support. The decisive rally above 3.02, a prior swing high, on November 20 triggered a bullish breakout of a symmetrical triangle pattern.
Once triggered the price of natural gas reclaimed the next two higher swings that construct the top of the triangle formation at 3.16 and 3.39, before peaking at a new trend high of 3.56. The 2023 peak is a little further up at 3.64. That was the highest traded price since January 2023.
Top Boundary Line of Triangle May Yet be Tested
Regardless of the potential for the 3.02 support zone to hold, there is also the top boundary line of the triangle a little lower, around 2.92, depending on when it might be reached. The line also defined resistance at the top of the triangle. It could still be tested as support. The line is joined by 2.90 and 2.88, the 127.2% extended target for the falling ABCD pattern and the 78.6% retracement level, respectively.
Daily Close Above 3.02 Wound Show Strength
A daily close above 3.02 would provide a small indication of strength that would need follow-through, and further still on a close above 3.04. Nonetheless, a bullish reversal would not be indicated until there was an advance above today’s low of 3.08, assuming there is not a new low for the current bearish retracement beforehand.
For a look at all of today’s economic events, check out our economic calendar.
