Natural gas broke below near-term support on Thursday as sellers took control, driving prices to a new low of $2.83. A daily close below the prior low would confirm the breakdown and point toward the next target near $2.69.
Natural gas broke below near-term support on Thursday, and the move keeps the focus on whether the current support zone can hold or give way to another leg lower. Sellers took control after a short-term bounce and pushed the market to fresh lows.
Prices first climbed to a four-day high of $2.97 near the open of Thursday's session before sellers stepped in and drove them sharply lower. Support near the recent low of $2.85 broke, and the market established a new low at $2.83. Trading held near the day's lows at the time of writing.
A daily close below the prior low would confirm the breakdown and extend the bearish trend. Analyst Bruce Powers identifies a potential support range from roughly $2.86 to $2.84, built from May's higher swing low and the 61.8% Fibonacci retracement. That zone marks the obvious spot to watch for signs of strength.
Thursday's bearish outside day engulfed the full range of the prior three sessions, a more significant bearish sign, especially on a close below Tuesday's low of $2.85. Because a trend reversal signal was briefly triggered on Monday's drop below May's higher swing low, a daily close below $2.86 would confirm that signal.
A further drop below Thursday's low would put natural gas on track toward the next target near the 78.6% Fibonacci retracement at $2.69. From there, a rebound or consolidation could develop.
If support holds near the current zone, an upside move could target the higher swing low at $3.02 and the 50-day moving average near $3.09. The 50-day average failed as support last week as natural gas fell sharply, so it may now act as dynamic resistance during any first leg up.
Source: FXEmpire
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