Natural gas price forecast: Market rallies but faces resistance at $4.50 amid seasonal shifts
Natural gas price tests $4.50 resistance as market weighs seasonal demand changes
Natural gas futures (NYMEX) have continued their bullish momentum, climbing toward $4.40–$4.50, where resistance is emerging. The price recently broke out of a descending trendline, signaling the end of a prolonged consolidation phase.
Support has been established in the $3.80–$4.00 range, helping sustain the rally. However, as market sentiment shifts with seasonal changes, traders are assessing whether prices can break through resistance or if a retracement is imminent.
Despite the rally, seasonal factors remain a concern. Warmer weather forecasts in the United States and Europe are expected to reduce demand for heating, which could limit further upside. If natural gas fails to breach the $4.50 resistance level, it may see a pullback toward $4.07 or $3.80 in the near term.
Natural gas price dynamics (Jan 2025 - Mar 2025) Source: TradingView.
Technical indicators signal caution
Momentum indicators suggest a cooling-off phase. The RSI is at 63.18, approaching overbought conditions, while the MACD is converging, indicating weakening bullish strength. The 50-day EMA at $4.22 is providing short-term support, while the 200-day EMA at $3.94 reinforces a broader uptrend. However, a failure to hold $4.26 could shift momentum downward, exposing support levels at $4.06 and $3.88.
Additionally, the Bollinger Bands indicate that price action is nearing the upper boundary, suggesting potential volatility ahead. If natural gas remains above $4.26 and breaks $4.50, it could move toward $4.78–$5.00, a key psychological level. Traders are advised to monitor volume closely, as a high-volume breakout above $4.50 could confirm sustained bullish momentum.
Market outlook and trading strategy
Natural gas prices remain at a critical juncture, with short-term bullish sentiment clashing with long-term seasonal trends. The $4.50 resistance zone remains a crucial level, and failure to break higher could lead to a downside move toward $4.07 or $3.80. However, continued demand from Europe and LNG exports could provide some support in the near term.
From a trading perspective, buying near $4.07–$4.10 with a stop loss below $3.80 offers a favorable risk-reward setup. Meanwhile, short positions near $4.50–$4.70 could be considered if resistance holds. The market’s next move will depend on weather patterns, economic data, and inventory reports.
As previously discussed, natural gas has been trading within a strong upward channel, but the current resistance near $4.50 is acting as a significant barrier. With seasonal demand expected to decline, traders should be cautious of profit-taking or a potential correction. However, as long as $4.07 holds as support, the broader bullish trend remains intact.
