Natural gas broke through several support zones on Thursday to hit a 28-day low of $2.99, triggering a bearish trend reversal signal. Sellers now control price action, with the April low of $2.50 flagged as a potential downside target if weakness continues.
Natural gas turned decisively lower on Thursday, breaking through several support zones to reach a 28-day low of $2.99. The selloff began with a drop below Wednesday's low of $3.20, and weakness was quickly confirmed as price slid past the interim swing low of $3.12.
Price then tested the 50-day moving average as support. That level failed to hold, sending price below the recent higher swing low of $3.02. This sequence of breakdowns suggests short-term momentum has shifted back toward sellers.
Bearish structure expands beyond recent weakness
Thursday's decline through multiple price levels shows sellers clearly in control, and the triggering of several reversal signals suggests they may continue to dominate in the coming days and weeks. The move points to the potential continuation of a developing bearish structure that began after the January spike high of $7.44.
The recent high of $3.40 now stands as a lower swing high within that larger downtrend, with a bearish reversal confirmed during Thursday's decline below $3.16. The signal highlights the April low of $2.50 as a potential downside target, with lower levels in play if that floor breaks. In the short term, a daily close below $3.02 would confirm the reversal and raise the chance of those targets being reached.
Key support levels define the next test
A higher swing low from May at $2.86 and the 61.8% Fibonacci retracement level mark the next target zone, and given the wide-range red candlestick, a test of that area may come quickly. Below it sits another higher swing low at $2.68, the next lower target. A failure of both would further reinforce the developing bearish structure.
Weekly support could determine the next move
The weekly chart shows support being tested near the 20-week moving average, currently near $2.99. That average held as support for three consecutive weeks during the initial pullback from the June peak. Whether natural gas can hold it may decide if a temporary rebound develops or the broader decline resumes.
Source: FXEmpire
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