Natural Gas Price Forecast: Bearish Trends Weighing on NG=F - What’s Next for the Market?

Natural Gas Price Forecast: Bearish Signals Grow as Price Tests Key Support Levels

Natural gas prices have been experiencing significant fluctuations in recent weeks, with the price falling to new pullback lows and encountering multiple bearish technical signals. As of Thursday, natural gas prices reached a low of $3.34, breaking through minor support levels and showing further signs of weakness. With NG=F testing key support levels, traders are keeping a close eye on whether the price will continue its downward trend or rebound from current levels.

Bearish Technical Indicators Point to Further Decline

The recent price action in the natural gas market indicates that NG=F is facing increasing bearish pressure. On Thursday, the price dipped below the $3.42 support level, which had previously served as an important price floor. This breach marks a bearish reversal of the recent uptrend, suggesting that the momentum has shifted to the downside. Furthermore, the price has been trading in the lower third of the day’s price range, reinforcing the bearish sentiment in the market.

In addition to breaking key support levels, natural gas prices have also encountered resistance at the neckline of a head-and-shoulders pattern. The recent high of $3.73 completed a successful test of resistance at this neckline. This pattern, which typically signals a reversal of the prevailing trend, raises concerns that the natural gas market could be on the verge of a more significant downturn. The neckline resistance, coupled with key technical indicators such as the 50-day moving average and 61.8% Fibonacci retracement, further strengthens the case for potential downside.

Key Support and Resistance Levels to Watch

As the price of NG=F continues to struggle with bearish pressure, there are critical levels to monitor. A key support zone lies at the 50% Fibonacci retracement level around $3.45, which has acted as a potential reversal point in previous price action. If natural gas fails to hold at this level, the next support targets are $3.23 and $3.16, with the 61.8% Fibonacci retracement at $3.23 being particularly important. Should the price fall below this level, the next downside targets could be $3.10 and $3.00.

On the other hand, for natural gas to regain bullish momentum, it would need to break above the $3.42–$3.45 resistance zone. A clear breakout above this zone could indicate a shift in sentiment and lead to a possible rally toward $3.60 and $3.73 levels. However, with the market currently under pressure, the path of least resistance appears to be to the downside, at least in the short term.

Inventory Data and Broader Market Conditions Impact Natural Gas Prices

Recent inventory data from the Energy Information Administration (EIA) showed an increase of 110 billion cubic feet (Bcf) in gas storage for the week, which was in line with market expectations but higher than the five-year average of an 83 Bcf increase. Despite the rise in storage, natural gas inventories remain 14.3% below last year’s levels, signaling ongoing concerns about supply resilience. This has reinforced the bearish sentiment in the market, as traders are wary of a potential oversupply in the coming months, particularly as heating demand drops.

At the same time, there are external factors weighing on the market. The broader energy sector has been under pressure, with oil prices seeing mixed performance due to concerns over rising global supply. This has further put a damper on natural gas prices, especially as traders focus on the demand side of the equation. As heating demand declines and summer approaches, the outlook for natural gas remains uncertain, with the possibility of further downside if the market fails to recover.

Market Sentiment and Future Outlook for Natural Gas

Despite the recent pullback, natural gas traders remain cautious about the long-term prospects for the market. With prices currently hovering around $3.35, the market is at a critical juncture. A failure to hold key support levels could lead to further declines, but there is still potential for a rebound if bullish momentum can emerge. However, this recovery will require a shift in market sentiment, with traders looking for signs of increased demand or positive catalysts that could support higher prices.

In conclusion, the current technical and fundamental landscape for NG=F suggests that natural gas prices may continue to face downward pressure in the near term. The breach of key support levels, combined with bearish technical patterns, signals the potential for further declines. However, any recovery in demand, particularly from Europe, could provide some support for the market. For now, the focus remains on whether NG=F can hold at $3.35 or break through further support zones in the coming weeks. As always, traders should keep a close eye on inventory data, geopolitical developments, and broader market conditions that could influence natural gas prices.

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