Natural Gas (NATGAS/USD) Price Technical Analysis for Aug. 11, 2020

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Natural gas has formed higher lows to trade above a rising trend line on its 4-hour chart. Price could be due for a pullback to this support zone and the Fib retracement tool shows where buyers are waiting.

The 61.8% level is closest to the trend line support around the $1.900 mark while the 38.2% level could be enough to hold if buyers are eager to return around the $2.000 major psychological level.

The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that the climb is more likely to resume than to reverse. The gap between the moving averages is even widening to reflect strengthening bullish momentum, and the 100 SMA lines up with the 50% Fib to add to its strength as support.

The 200 SMA is slightly below the trend line around the $1.750 level as the line in the sand for a correction. A break below this could mean that a reversal from the uptrend is in order.

RSI has some room to head lower to indicate that selling pressure is present, and this could continue until oversold conditions are met. Stochastic is a bit closer to the oversold region to signal potential exhaustion among sellers soon. Turning back up could confirm that bullish pressure is returning and that a move back up to the swing high could follow.

Natural gas is enjoying a bit more demand these days as cooler weather conditions are about to set in by next month. A return in lockdown measures could also bring in an increase in purchases of heating commodities in the coming weeks, especially if COVID-19 cases continue to rise.

As in previous weeks, the inventory data from the Department of Energy could also set the tone for short-term price action, with a drop in stockpiles buoying prices higher.

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