Natural Gas at $2.69: Can the Fed Hold Spark a Bounce?

The Federal Reserve held rates steady on Wednesday, a decision that drew three dissents and sent the dollar lower. The reaction in natural gas was subdued, but the contract is now trading near a critical Fibonacci support zone that could determine the next move.

Bruce, a technical analyst and CMT charter holder, said the front-month contract traded between $2.67 and $2.74 on Wednesday, holding above the 78.6% Fibonacci retracement of the prior advance at $2.69. Tuesday's close at $2.64 had confirmed a break below that level, but Wednesday's price action stayed largely above it – a minor sign that sellers may be losing momentum near support.

A deeper decline would likely find a floor near the 88.6% retracement at $2.60, which is close enough to the current low that bearish momentum could be approaching exhaustion. That sets up the possibility of a countertrend rally toward resistance zones above. A break above Tuesday's high of $2.76 would signal a short-term bullish reversal, putting the contract on course to test the first target around $2.86.

The more significant upside target sits in the $2.96 to $2.99 zone. That range packs the 20-day moving average at $2.96, the 100-day moving average at $2.97, and a lower swing high from a prior consolidation range at $2.99. The clustering of resistance indicators suggests the area could cap any rally, while also making it a magnet for price action before the move exhausts.