Natural gas recently fell through support around the $4.000 mark and appears to be retesting the area of interest. If this holds as resistance, the commodity price could slide to the bearish targets marked below.

The Fibonacci extension tool shows that the 50% level is around the swing low, which could be a prime target level for sellers. Stronger selling pressure could take it down to the 61.8% level at $3.706 or the 76.4% level at $3.635. The full extension is at $3.521.

The 100 SMA is still above the 200 SMA to signal that the path of least resistance is to the upside or that there’s a chance the uptrend could resume. Then again, price is trading below the 100 SMA dynamic resistance, and the gap between the indicators is narrowing to reflect weakening bullish momentum.

Stochastic appears to be turning higher on its move south, suggesting that buyers might try to take over from here. A break above the 100 SMA or the $4.000 handle could confirm that bullish pressure is back in play.

Natural gas could take cues from the upcoming inventory release by the Department of Energy. Analysts are expecting to see a smaller build of 40 Bcf versus the earlier increase of 46 Bcf, reflecting a pickup in demand.

However, weather forecasts have been looking mixed, so the dip in temperatures might have led to lower purchases of the cooling commodity. This also suggests that the summer season is drawing to a close, likely leading to more downside for the commodity in the coming months.

Risk sentiment might be the main driving factor moving forward, as the Jackson Hole Symposium might have some hints on Fed policy. Powell’s speech would likely lead to strong moves in financial markets, especially if he confirms that the Fed is moving closer to tapering by the end of the year.