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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Natural gas price forecast: two-day win streak falls apart

Natural gas prices reversed two-day win streak; downside momentum strong, Head & Shoulders trajectory in focus and will 2.326 support level hold?

Source: Bloomberg

Head & shoulders trajectory remains in focus

Following a 7th consecutive weekly loss, Natural Gas prices are little changed as we head into the remainder of the week. A push higher on Monday and Tuesday was reversed on Wednesday, leading the commodity back down toward the March 2021 low of around 2.422. That is standing in the way between prices and lows from 2020 (1.44 – 1.612).

With the downtrend since last year showing few signs of slowing, the bearish Head & Shoulders chart pattern remains in play. The anticipated trajectory could lead prices down to lows from 2020. A lack of RSI divergence continues to show that downside momentum remains strong. Even so, the commodity experienced nine consecutive weeks of losses during the Fall of 2022.

It will take a 10th to set the longest losing streak since 1991.

Natural gas futures weekly chart

Source: TradingView

Bounce off support fades

Zooming in on the daily chart will show a better picture of how upside momentum faded over the past 24 hours. Last week, prices fell to the 100% Fibonacci extension level at 2.326 as the downtrend slowed. This established that level as key support. A push higher on Monday and Tuesday was wiped out after prices sank 7.28% over the past 24 hours.

Clearing support exposes the 114.6% Fibonacci extension level at 1.555 toward 2020 lows. In the event of a turn higher, keep a close eye on the 20-day Simple Moving Average (SMA). The latter could hold as resistance, maintaining the downside focus. There hasn’t been a test of this line since the middle of December. Closing above it would place the focus on the December 2021 low at 3.536.

This price could establish itself as new resistance.

Natural gas futures daily chart

Source: TradingView

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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