The confluence of the 20-Day moving average at $2.92 and the 50% retracement at $2.91 marks the first notable support area. This zone has contained declines over the past two days, and a bullish reversal could still trigger from here. If today’s low is broken, however, further downside levels come into focus, including the interim swing low at $2.87 and the 61.8% Fibonacci retracement at $2.84. Both align with the midpoint line of the large descending channel highlighted on the chart.
Watching the Channel Boundaries
Natural gas continues to respect the structure of the descending channel. The center line was tested as support in March and as resistance in mid-August, and most recently, the upper quarter line capped the September 8 swing high. These repeated interactions reinforce the channel’s importance as a guide. If the 61.8% retracement fails to hold, the lower center line of the channel becomes the next downside target. Certainly, a drop below the Fibonacci level could unfold given the wide range weekly bullish engulfing candle that completed two weeks ago.
Bigger Picture Trend Signals
The break below the long-term uptrend line on August 11 remains a key bearish development. A subsequent rally into that line was rejected, confirming its role as resistance. While this suggests the larger downtrend may be reasserting itself, price action still needs to be assessed step by step as patterns develop. The current pullback could remain controlled if buyers defend support levels.
Weekly Chart Perspective
On the weekly chart, natural gas is set to close with a higher high and higher low, but still down for the week and below a long-term AVWAP around $2.96. This reflects short-term strength within a broader bearish bias. Heading into next week, a drop below this week’s low of $2.90 would confirm a one-week bearish reversal and keep pressure on towards lower support zones.
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