Natural gas has climbed to the top of its ascending channel on the 4-hour time frame and might be due for a correction from its climb. The Fibonacci retracement tool shows where more buyers are waiting.

The 38.2% level lines up with the mid-channel area of interest around $5.235, then the 50% level is at $5.100. A larger correction could reach the 61.8% Fib that lines up with the channel support, $5.000 major psychological mark, and 100 SMA dynamic inflection point.

On the subject of moving averages, the 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that support is more likely to hold than to break. Sustained bullish momentum might even lead to a break past the channel top at $5.680.

However, stochastic has been indicating overbought conditions for quite some time, so turning lower would confirm that a correction is takin place.

Similarly RSI also reached the overbought zone to suggest that buyers are exhausted and that sellers could take over from here.

Natural gas got a strong boost when US President Biden reiterated that the US is ready to export more LNG to Europe, possibly in hopes of getting the region to announce an embargo on Russian commodities.

This could mean lower inventory levels down the line, as local producers scramble to meet rising demand from overseas. Although temperatures are starting to rise in some parts of the US, cold weather is still in place in Europe, and the energy crunch due to sanctions on Russia is weighing on their supply.

The upcoming inventory report from the Department of Energy might not reflect the pickup in exports just yet, although another draw in stockpiles might be enough to spur gains for natural gas. A build, on the other hand, would signal that local demand is sliding.