Natural gas is trending lower on its short-term chart, with lower highs connected by a descending trend line that’s been holding since the first week of August.

Price looks due for another test of this resistance level, although the near-term ceiling at the 50% Fibonacci retracement level is holding. This lines up with the 100 SMA, which is below the 200 SMA to confirm that the selloff is more likely to resume than to reverse.

The 200 SMA coincides with the trend line and is also near the 61.8% Fibonacci retracement at $4.016. If any of these hold as resistance, natural gas could slump back to the lows at $3.820 or lower.

Stochastic is already turning lower after reaching the overbought zone to reflect exhaustion among buyers. The oscillator has plenty of room to move south before reaching the oversold region, so natural gas price could follow suit.

RSI is also on the move down after turning lower from the overbought area, confirming that sellers are returning while buyers take a break.

Natural gas could be under prolonged downside pressure as the end of the summer season approaches. This means lower demand for cooling commodities in the coming weeks, especially with weather forecasts giving mixed predictions.

Still, a large draw in stockpiles as reported by the Department of Energy could bring some gains since this would signal that purchases remain supported.

Geopolitical risks could also come in play since this impacts commodities and financial markets overall. The tension in the Middle East with US forces withdrawing from Afghanistan might keep traders risk averse, choosing to put money in safe-haven assets instead of higher-yielding ones.

Also, the upcoming release of the FOMC minutes might impact the outlook for the global economy, as any indication that they’re considering tapering might bring risk-off flows.