If it falls below 2.00, the target is 1.92
A decisive breakdown below 2.00 would signal that the bearish trend is likely to continue. Natural gas will head towards the next lower support zone, which is anchored near the 78.6% Fib retracement at 1.92. The price area at 1.94 is also worth watching. It was previously resistance at the minor swing high on April 10 but may now represent support. Note that there is an unfilled gap to be filled at 1.94.
Keep in mind that support was found at the three-month low of 1.91 in May. If the current bearish retracement fails to find support above 1.91, a drop below 1.91 will trigger a monthly bearish continuation signal. If that happens, the next downward support zone near 1.85 to 1.80 could be next on the agenda.
This week’s bearish signal was triggered today
Today’s decline caused a bearish weekly continuation as it fell below last week’s low of 2.015. As the week concludes today, natural gas is expected to close weakly near the low of this week’s trading range, a bearish move that increases the likelihood of a test of lower support levels.
A clearer sign of weakness would be indicated if the week ended below last week’s low. Either way, this would be the sixth consecutive week of lower weekly highs and lows, suggesting the decline will continue on a bearish note.
A rise above today’s high of 2.08 is a sign of strength
There remains a chance that the 2.00 support zone will hold and demand will pick up. That scenario would be indicated by a move above today’s high of 2.08. The 20-day moving average at 2.26 and this week’s high at 2.27 would provide the first upward pivot.
