Natural Gas Price Outlook: Tests a Key Support Level -What’s Next?
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Natural Gas Technical Forecast
- Selling pressure builds up
- Bearish signals on Natural gas price chart
Natural Gas Price – Bears ease up
On May 13, natural gas tumbled to a five-week low at $1.727 then rallied after as some bears seemed to cover. Yet, the weekly candlestick closed on Friday in the red with nearly 8.5% loss.
Alongside that, the Relative Strength Index (RSI) remained flat below 50 highlighting a paused bearish momentum.
Nat-Gas DAILY Price CHART (Jan 2, 2019 – MAy 21, 2020) Zoomed Out
Natural Gas DAILY Price CHART (Jan 22 – May 21, 2020) Zoomed IN
Looking at the daily chart, in early May bulls pushed natural gas to a near four-month high at $2.214. However, the price corrected its uptrend and created on May 11 a lower high at $2.000. Yesterday, the market U-turned before testing the high end of the current trading zone $1.850- $2.050 and generated a bearish signal.
A close below the low end of the aforementioned zone may encourage bears to press towards $1.655. A further close below that level could send the price even lower towards $1.430. In that scenario, the weekly support areas underscored marked on the chart (zoomed in) should be considered.
Any failure in closing below the low end of the zone indicates that bulls may come back and push towards the high end of the zone. A further close above that level could extend the rally towards $2.139. That said, the weekly resistance levels underscored on the chart should be watched closely.
Natural Gas price Four-Hour PRICE CHART (Mar 25 – May 21, 2020)
From the four- hour chart, on May 12 the price broke below the uptrend line originated from the April 30 low at $1.843 and generated a bearish signal. This week, natural gas has failed on multiple occasions to overtake this line highlighting the bull’s lack of momentum to rally the market.
A break below $1.815 would be considered a bearish signal and may send the price towards $1.745. Although, the daily support level underlined on the chart should be kept in focus. On the other hand, a break above $1.886 may trigger a rally towards $1.984. Nonetheless, the daily resistance level printed on the chart should be monitored.
See the chart to find out more about the key technical levels to keep in mind in a further bullish/bearish scenario.
Written By: Mahmoud Alkudsi, Market Analyst
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.