Natural gas is still trending higher inside its ascending channel on the 4-hour chart, bouncing off support and possibly setting its sights back on the resistance levels again.

Technical indicators confirm a likely continuation of the uptrend, as the 100 SMA is above the 200 SMA and is in line with the channel bottom to add to its strength as support.

Stochastic is on the move up, indicating that buyers could stay in control for a little longer before overbought conditions are met. RSI also has room to climb, so natural gas could keep following suit.

The next resistance level is at the mid-channel area of interest around $4.200, which is also around the latest highs. The channel top at $4.400-4.500 might also keep gains in check.

Natural gas could take cues from the upcoming inventory report from the Department of Energy, especially since a larger build is expected this time. Analysts are projecting a gain of 47 Bcf in stockpiles versus the earlier 13 Bcf increase, reflecting weaker demand or a buildup in output.

Weather forecasts are looking mixed, with some signaling that the high temperatures might be peaking soon. This could mean a downturn in demand for natural gas as the warmer weather would sap purchases of cooling commodities.

Still, risk appetite has been supportive of commodity gains, as traders seem convinced that the period of low US borrowing costs could last longer. US CPI figures are up for release later today, and weaker readings are eyed.

This would underscore the US central bank’s view that the pickup in price pressures has been transitory, which would give them reason to keep stimulus measures in place and refrain from tapering anytime soon.

An upside surprise in the CPI report, on the other hand, might fuel tapering speculations as the Fed would need to act in order to keep price levels stable.