Natural gas continues to trend lower inside a newly-forming descending channel on its 4-hour chart. Price has broken below the mid-channel area of interest to reflect an acceleration in bearish pressure.

The 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside or that the selloff is more likely to gain traction than to reverse. Price is closing in on the 61.8% level around $1.530 but might still have enough momentum to reach the next downside target at the 78.6% Fib.

This is closer to the channel support and the $1.500 major psychological mark, which could be a strong support zone. Sustained selling pressure could take natural gas down to the full extension at $1.456.

RSI is still pointing down but already dipping into the oversold region to signal exhaustion among sellers. Turning back up could show that bullish momentum is returning and that a bounce off support areas might follow. Stochastic has been indicating oversold conditions for quite some time, and price could follow suit once the oscillator pulls up.

Natural gas has been on weak footing mostly on account of lower demand for heating commodities around this time of the year. After all, summer months are setting in and bringing about warmer temperatures.

At the same time, risk aversion is hurting demand for commodities and higher-yielding assets. Traders are focused on the second wave of coronavirus cases, which could prompt weaker business and consumer activity, as well as another round of quarantine measures.

In addition, the latest export data from the Energy Information Administration confirmed that LNG exports declined substantially in 2020. Daily natural gas deliveries to U.S. facilities that produce liquefied natural gas for export were a record 9.8 billion cubic feet per day in late March 2020, but deliveries fell to less than 4.0 Bcf per day in June.