Natural Gas Technical analysis

Source: Dukascopy Bank SA
Natural Gas is showing signs of a significant potential shift. After being in a clear downtrend defined by a descending channel for an extended period, the price has now broken out above the channel's upper trendline, suggesting the long-term bearish pressure may be waning. This potential bullish reversal is supported by the technical indicators. The Relative Strength Index (RSI) has moved into bullish territory above 50 and previously showed bullish divergence, indicating that downward momentum was fading.



The price is at a critical inflection point around the 2.88 zone, which represents the confluence of the broken channel line and the 100-period SMA. For the breakout to be confirmed, buyers must maintain control and achieve a sustained close above this 2.88 level, which would likely trigger a move towards the first major resistance at 3.08. Conversely, if the price fails to overcome this resistance and falls back inside the descending channel, it would be considered as a false breakout. This would be a strong bearish signal, implying the downtrend is still intact and could lead to a decline back towards the recent lows around 2.70.

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