Natural Gas Prices Test Key Resistance Ahead of Potential Breakout
Natural gas prices are currently testing a critical technical level, with bullish signals suggesting a potential breakout. On Tuesday, prices reached $3.127, challenging the 200-day moving average, which sits near $3.12. This average acts as key resistance, and a successful break above it could pave the way for further upside. However, an earlier attempt to reclaim this level failed two weeks ago, making this test even more crucial for confirming a bullish trend.
The weekly chart shows strengthening support, with this week's low at $2.997 and a rejection of lower prices at the 20-week moving average. This shift from resistance to support indicates growing demand. Unless prices fall below this week's low, the next upside target is last week's high of $3.18, which, if surpassed, would further validate buyer control.
A higher swing low established last week at $2.912, coinciding with a 78.6% Fibonacci retracement, provides additional evidence of buyer defense at higher levels. The weekly chart also shows increasing price compression, which often precedes a sharp move. Given the bullish indications, a breakout above the 200-day moving average could confirm the continuation of the upward trend.