Natural gas appears to be finding support at the 38.2% Fibonacci retracement level and could resume the climb back to the swing high.

A larger pullback could still reach the 50% Fib that lines up with the 100 SMA dynamic support or the 200 SMA closer to the rising trend line and 61.8% Fib.

With the 100 SMA above the 200 SMA, the path of least resistance is to the upside. In other words, support is more likely to hold than to break. If any of the Fibs hold as support, natural gas could make its way up to $3.088 or higher.

Stochastic is pulling up from the oversold region to indicate that buyers are taking over while exhausted sellers are taking a break. RSI is also turning higher without reaching the oversold area, indicating that bulls are eager to return.

A break below the rising trend line, however, could signal that a selloff is underway.

Natural gas prices could take cues from the Department of Energy’s inventory report, which is slated to show a smaller build of 95 Bcf compared to the earlier increase of 115 Bcf. This would reflect a slightly stronger pace of purchases in the reporting week.

Keep in mind that warmer temperatures have been reported recently, which likely lifted demand for cooling commodities. Forecasts of even higher temperatures in the coming weeks could bring more upside for natural gas.

In addition, risk sentiment as affected by the NFP release and leading indicators could impact commodity movements. Analysts are expecting a slight pickup in hiring for May compared to April, which might boost Fed tapering hopes.

Weak data, however, could lead analysts to project that rates could stay lower for much longer, which would then lift business and consumer sentiment. This could be bullish for commodities as investors take on stronger risk appetite.