Natural gas could be in for a pullback, as price is stalling on its rally to the $3.600 levels. Applying the Fibonacci retracement tool shows where more buyers might be waiting.

The 61.8% level lines up with the rising trend line support around $3.300 and the 100 SMA dynamic inflection point. The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside, and the gap between the two is widening to reflect stronger bullish momentum.

A shallow correction could already find buyers at the 38.2% Fib at $3.432 or the 50% level at $3.372. If any of these Fibs hold, natural gas could recover to the swing high or higher.

However, stochastic is indicating overbought conditions or exhaustion among buyers, so turning lower would mean that sellers are taking over. Similarly RSI is pointing down to show that price might follow suit while bearish momentum picks up.

Natural gas is drawing support from stronger demand owing to higher temperatures in several parts of the US. This is boosting purchases of heating commodities during the summer season, which could last for a few more weeks.

The upcoming inventory data from the Department of Energy should confirm whether or not demand is sustained, as a draw in stockpiles might mean another leg higher for the commodity. A surprise build, on the other hand, could signal that producers are ramping up output to meet the seasonal pickup.

The upcoming NFP release might also impact commodity prices in general since this report tends to affect overall market sentiment.

A strong read could signal that the Fed might move closer to tapering soon, which might then bring risk-off flows and weigh on natural gas prices. On the other hand, a downside surprise could keep traders hopeful that low borrowing costs could stay in place for much longer.