Technical outlook:
Natural Gas continued to rise towards 6.70 during the early Asian session on Wednesday, falling in line with our forecast. The near-term target potential remains at 8.30 before the drop resumes towards 4.63 going forward. Bulls might want to hold prices above 6.06 to keep the near-term structure intact.
Natural Gas has carved a meaningful larger-degree upswing between 1.52 and 9.65 since June 2020. The entire rally seems to be complete at 9.65 as both Fibonacci extensions have been met as seen on the daily chart. Ideally, prices should retrace the entire rally through 4.63, which is the Fibonacci 0.618 retracement and strong potential support.
Natural Gas has carved its first downswing between 9.65 and 6.06 recently. Prices are working on the same at the moment and could retrace up to 8.3, which is the Fibonacci 0.618 retracement of the above drop. Bears will be poised to come back in control thereafter and drag prices through 4.63.
Trading plan:
Potential drop to 4.63 against 9.65
Good luck!
