Natural Gas (NATGAS/USD) Price Technical Analysis for June 23, 2022

Natural gas is still on the retreat but might be due to find support at a major area of interest soon. Price is closing on the 61.8% Fibonacci retracement level on the daily time frame.

This lines up with a former resistance area at $6.150 that might hold as support. If so, natural gas could resume the climb to the swing high next. This potential support area also coincides with the 100 SMA dynamic inflection point which adds to its strength as support.

The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that support is more likely to hold than to break. The gap between the indicators is widening to reflect strengthening bullish momentum as well.

Meanwhile, stochastic already made it down to the oversold region to reflect exhaustion among sellers, so turning higher would mean that buyers are taking over. RSI has more room to slide before reaching the oversold territory, so the correction could keep going until it does.

Natural gas could take cues from the upcoming inventory report from the Department of Energy, which is slated to report a smaller draw of 63 Bcf compared to the earlier increase of 92 Bcf. This would reflect stronger demand or weaker supply conditions, which might be bullish for the commodity.

Note that weather agencies are predicting warmer summer temperatures up ahead, which could boost demand for cooling commodities like natural gas.

However, a larger than expected increase in stockpiles would signal that purchases have slowed due to warmer temperatures all over the US. This could also reflect a rebound in production now that some facilities have reopened recently.

In addition, the push to reduce reliance on natural gas might also be long-term bearish for the commodity, even as Europe’s looming embargo on Russian oil might soon spur an energy crunch.

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