Natural gas is moving sideways in a short-term range, finding support at $2.985 and resistance around $3.060. Price is currently testing the top of its range and could retreat to the bottom again.

The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that the ceiling is more likely to break than to hold. If that happens, natural gas could climb by around the same height as the range.

Price is also trading above both moving averages, so these could hold as dynamic support on dips. Then again, the gap between the two appears to be narrowing to reflect weakening bullish momentum.

Stochastic is turning lower to show a return in selling pressure, and the oscillator has plenty of room to move south before reflecting oversold conditions. RSI is also turning lower without reaching the overbought zone, hinting that sellers are eager to take over.

In that case, a move back to the bottom of the range might be in order or perhaps even a break lower, followed by a selloff of the same height as the rectangle pattern.

Natural gas is drawing some upside from expectations of stronger seasonal demand for cooling commodities. Warmer weather is being reported in several parts of the US, and agencies continue to project higher temperatures in the weeks ahead.

In addition, risk-taking continues to favor gains for higher-yielding assets since the Fed might hold out from tapering asset purchases anytime soon. Keep in mind that the NFP reading turned out weaker than expected, so the US central bank might keep stimulus in place for much longer.

Upcoming inventory data from the Department of Energy would likely impact short-term volatility and determine whether or not a breakout or bounce is due.