Technically, the market is now testing the 50% retracement of its short-term range ($3.149 to $3.629) at $3.389. A sustained move below this key level would likely signal additional downside momentum and embolden bearish traders. For now, price action suggests a near-term correction rather than a structural breakdown, but much hinges on whether bulls defend this support area.

Are Supply Fundamentals Providing a Ceiling on Rallies?

Supply remains robust, and with wind generation expected to remain light, gas-fired power demand is elevated. Still, the modest step back in heat intensity and the market’s inability to punch through long-term moving averages point to traders being wary of chasing higher prices, especially ahead of updated EIA storage data and further weather model revisions later in the week.

Market Forecast: Bearish Near-Term Outlook

Given the inability to clear overhead resistance and the bearish revision in weekend weather forecasts, the near-term outlook for U.S. natural gas leans bearish. A decisive move below $3.389 would confirm downside momentum, potentially drawing prices back toward $3.30. Traders should watch for further updates to heat forecasts and monitor how the market reacts to the current support zone in the coming sessions.

More Information in our Economic Calendar.