FX.co ★ Elif | Natural Gas (NG)

Natural Gas Natural Gas (NG) is facing significant technical pressure this week, with the front-month contract currently consolidating near the $4.11** handle. Recent trading has seen prices test the **$4.098 - $4.126 zone, which marks a critical turning point as the market seeks directional certainty after a notable pullback from higher levels. The technical picture shows a market stuck in a short-term structure. The chart shows a clear descent from the $4.60** area, with price action now challenging key support. Key levels to watch are the recent lows around **$4.05 - $4.10**. A sustained break below this consolidation could open the way to the next major support near the **$4.00 psychological level and potentially the $3.85 region where long-term buyers could re-enter. However, the most compelling data point is the 14-period RSI reading of 32.62. This places the commodity in a strongly oversold area, indicating that recent selling may be overbought in the near term. While not a direct buy signal, this level of momentum divergence often precedes a period of consolidation or technical bounce. Traders should watch for any bullish divergence or hook above the 30 RSI level as an early sign of selling exhaustion. Immediate resistance now stands at the $4.25 - $4.30 zone, which was previous support. Any corrective bounce could face strong selling pressure there. A more significant hurdle awaits near $4.45 - $4.50, which would need to be reclaimed to suggest that the broader downtrend is invalidating. Outlook: The bias remains cautiously bearish below $4.30**, with the oversold RSI advising against aggressive new short entries at current levels. The most likely scenario is continued choppy, range-bound trading between **$4.05 and $4.25** as the market digests the recent move. **A closing break above $4.30 could trigger a short-covering rally towards $4.45**, while a daily close below **$4.05 would likely accelerate losses towards the $3.90 handle. Traders should prioritize risk management, as volatility in energy markets remains elevated.