Natural Gas Holds Below 20-Day MA as Traders Eye $2.62 Support

Natural gas futures settled Friday at $2.78, a new low for the current move and a third straight session below the 20-day moving average. The price tested that average at $2.77 intraday and failed to close above it, a pattern traders said keeps the near-term trend bearish.

The three-week consolidation range between $2.62 and $2.83 has formed near the bottom of a longer downtrend that began in early May. The $2.62 low, set on June 4, marked an 88.6% Fibonacci retracement of the prior rally from $2.48 to $3.28. That retracement level is the deepest before a break below the prior swing low, several technical analysts said.

Some traders see limited downside from here, citing the consolidation and the May 7 higher swing low at $2.68 as potential support. "The range is compressing, and we've seen buyers step in near $2.62 twice now," one Chicago-based futures broker said. "But until we get a daily close above $2.81, the bias is still lower."