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Natural gas<\/a> breaks down from an inside day today before triggering a trend continuation on a drop below the prior retracement low of 2.57. Subsequently, support was seen at the day\u2019s low of 2.52, leading to a minor bounce.<\/p>\n<\/div>\n<\/div>\n That low completed an 88.6% Fibonacci retracement. This is the maximum Fibonacci retracement that is considered in the analysis as a decline below it would be considered a failure of the retracement. It increases the chance for a drop below the prior swing low at 2.46 and therefore a bearish trend reversal.<\/p>\n During today\u2019s decline natural gas completed a falling ABCD pattern at 2.546. This pattern anticipates support being seen at the completion. It completes where the decline in the CD leg of the pattern matches the AB leg of the retracement. At the time of this writing natural gas is back above the 2.546 target whereas it could act as resistance instead, a minor sign of strength. Today\u2019s price action could lead to a bullish reversal as the bottom may have been hit. Since the ABCD pattern completion is combined with natural gas hitting the 88.6% retracement, the chance that a low has been reached increases.<\/p>\n Nevertheless, further evidence is needed. A decisive rally above today\u2019s high of 2.64 provides a sign of strength, while a daily close above it will confirm the price action. Of course, additional upside follow-through is needed to further confirm that the retracement is over, and the dominant uptrend can again exert its influence.<\/p>\n Following a breakout above today\u2019s high natural gas will need to get above Thursday\u2019s high of 2.67 to provide confidence. At that point it will be above resistance of the downtrend line, as well as the 12-Day EMA, further confirming strength. The next higher price target would then be the minor swing high around 2.79. That price level is followed by this week\u2019s high of 2.86, which matches the swing high on the daily chart.<\/p>\n On the downside, a break below today\u2019s low has natural gas targeting the 127.2% extension of the ABCD pattern. That\u2019s where the CD leg is extended by 127.2% of the AB leg.<\/p>\n For a look at all of today\u2019s economic events, check out our\u00a0economic calendar<\/a>. <\/b><\/p>\n<\/div>\n<\/div>\n88.6% Fibonacci Retracement Signifies Critical Level<\/h2>\n
Falling ABCD Pattern Completion Indicates Expected Support<\/h2>\n
Bullish Trigger Above 2.65<\/h2>\n
Breakdown Remains a Possibility<\/h2>\n