Natural gas recently busted through the resistance at the $3.070 mark and reached a high of $3.152 before pulling back. Price is retesting the area of interest to see if buyers would return here.

This lines up with the 50% Fibonacci retracement level, which could add to its strength as a floor. A larger pullback could reach the 61.8% Fib near the $3.050 minor psychological mark and the 100 SMA dynamic inflection point.

On the subject of moving averages, the 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that support is more likely to hold than to break.

Stochastic has already reached the oversold region to signal exhaustion among sellers, and turning higher suggests that buyers are taking over. RSI has more room to head lower, though, and is starting to head sideways to reflect consolidation.

If any of the Fibs are able to keep losses in check, natural gas could recover to the swing high or higher.

Natural gas is drawing support from higher temperatures, as this lifts demand for cooling commodities. Forecasts of warmer weather in the days ahead as summer rolls in could continue to boost purchases of natural gas.

The upcoming inventory data from the Department of Energy should bring in additional volatility this week, as another large draw in stockpiles could mean more upside for the commodity. A surprise build, on the other hand, could mean near-term losses.

Analysts are projecting a build of 99 Bcf after the earlier increase of 98 Bcf.

The EIA reported that natural gas consumption in the US electric power sector grew to a record-high 11.6 trillion ft³ in 2020, up 3% compared with 2019. Approximately 55% of US natural gas exports in 2020 were sent by pipeline to Mexico and Canada while the rest was mostly shipped overseas as LNG.