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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 technical outlook: falling wedge remains in play on the four-hour

Natural gas fell 12.5% from last week’s high to the close; the broader downside trajectory remains in focus ahead and Falling Wedge chart pattern a key highlight on the four-hour.

Source: Bloomberg

Prices consolidate around the March 2021 low

Natural gas prices fell 3.8% last week, but if you measure from the high, it was closer to 12.5% as the heating commodity reversed intra-week gains. This price action continues to follow the broader bearish trajectory implied by the Head & Shoulders chart formation from late 2022.

Looking back, natural gas was consolidating around the March 2021 low at 2.422. That has generally been the case since prices reached this point back in late January. Let us take a closer look at the daily and four-hour charts to see what this week’s technical outlook looks like.

Natural gas weekly chart

Source: TradingView

February 3rd low in focus

On the daily chart, natural gas fell to the February 3rd low at 2.341 last week. As prices were unable to clear this point, it was reinforced as key support. Confirming a downside breakout under this price would open the door to revisiting the February low (which is also the current 2023 low) at 1.967. Otherwise, in the event of a turn higher, the 50-day Simple Moving Average (SMA) remains as key resistance. Closing above this line exposes the March high at 3.02.

Natural gas daily chart

Source: TradingView

Falling wedge remains in play

Zooming in on the four-hour chart, we can see that natural gas continued trading within the boundaries of a bullish Falling Wedge chart formation. The immediate outlook remains bearish, following the downside trajectory of this pattern.

That said, a confirmatory upside breakout would open the door to an increasingly short-term bullish perspective. That would place the focus on the 38.2% Fibonacci retracement level at 2.622 followed by the 23.6% point at 2.777. Otherwise, extending lower places the focus on the February low.

Natural gas four-hour 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.
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