Natural gas is forming a new descending channel on its 1-hour time frame, with price bouncing off support and pulling up to the mid-channel area of interest.

This could keep gains in check, as it lines up with the 50% Fibonacci retracement level and the 100 SMA dynamic inflection point. On the subject of moving averages, the 100 SMA crossed below the 200 SMA to indicate that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse.

More sellers could be waiting around the 61.8% Fib or the channel top closer to the $3.200 handle. A break past these inflection points could signal that a reversal from the slide is taking place.

Stochastic is indicating overbought conditions or exhaustion among buyers, and turning lower would confirm that sellers are taking over. RSI is on middle ground to reflect consolidation, though.

If the downtrend resumes, natural gas could slide back to the swing low around $3.123 near the channel support or lower. A break below the swing low could spur a steeper selloff for the commodity.

Natural gas could still draw strong support from the inventory report due later in the week, as another large draw in stockpiles would mean that demand remains supported. A surprise build, on the other hand, could mean some downside for the commodity.

Note that higher temperatures in the past few days likely lifted purchases of cooling commodities, and forecasts of warmer weather could continue to support natural gas prices.

Still, the pickup in risk aversion after the FOMC statement is weighing on riskier assets like commodities. After all, an earlier than expected increase in borrowing costs could hurt business activity and consumer spending, which might then weigh on investor optimism and demand for higher-yielders.