Skip to content

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. 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 instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. 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: prices struggling at support as a falling wedge pattern brews

Natural gas prices struggling to clear key support; four-hour chart shows that a Falling Wedge is brewing and the broader downside technical bias holds.

Source: Bloomberg

Support holding up

Natural gas prices have been aiming steadily lower in recent weeks. This continues to follow the trajectory of a bearish Head & Shoulders chart formation noted on the weekly chart. However, recent price action has been rather slow and steady as support has been reinforced. This seems to be around 2.341, an inflection point established back in February.

This is holding as immediate support. Breaking lower exposes the February low at 2.341. Beyond the latter sits the bottom from 2020 at 1.44. A meaningful push higher would likely entail clearing past the 50-day Simple Moving Average (SMA) as well as the March 3rd high at 3.027. The broader technical outlook remains bearish, with the falling trendline from August maintaining the dominant downside focus.

Natural gas daily chart

Source: TradingView

Falling wedge

Looking at the four-hour setting will help paint a clearer picture of the near-term outlook. Natural gas prices have been trading lower within the boundaries of a bullish Falling Wedge chart formation. This followed a confirmatory breakout under the 50-period SMA. While prices remain in the formation, the immediate technical bias points to a slight downward setting.

However, a confirmatory push above the Falling Wedge could open the door to an increasingly bullish technical bias. That would entail closing above the 38.2% Fibonacci retracement level at 2.622. That exposes the 23.6% level at 2.777 before the early March high comes into play. Otherwise, extending lower has immediate support at the 61.8% level at 2.373.

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 Markets Ltd and IG Markets South Africa 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. See full non-independent research disclaimer and quarterly summary.

Explore the markets with our free course

Discover the range of markets you can spread bet on - and learn how they work - with IG Academy's online course.

Try IG Academy

Turn knowledge into success

Practice makes perfect. Take what you’ve learned in this shares strategy article, and try it out risk-free in your demo account.

Try it out

Ready to trade shares?

Put the lessons in this article to use in a live account. Upgrading is quick and simple.

  • Trade over 16,000 popular global stocks
  • Protect your capital with risk management tools
  • Deal on 70 key US stocks out-of-hours, so you can react to news
Create live account

Inspired to trade?

Put the knowledge you’ve gained from this article into practice. Log in to your account now.

Log in now

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.