Natural gas is starting to break below a long-term rising trend line to signal a reversal from the climb. Technical indicators are giving mixed signals on a potential selloff, though.

The 100 SMA is crossing below the 200 SMA to hint that bearish pressure is picking up. Price is also trading below both moving averages, so these could hold as dynamic resistance on pullbacks.

Stochastic, however, has reached the oversold region to signal exhaustion among sellers. Turning higher could mean that buyers are ready to return and possibly allow the uptrend to resume. RSI is also heading south but dipping into the oversold territory, so sellers might need to take a break.

Natural gas is drifting lower as demand seems to be trickling down while temperatures turn slightly warmer than expected. Production is also increasing since a number of facilities have reopened following temporary closures, making up for lost output in the past weeks. In combination, these factors could keep a lid on price gains for the commodity.

However, risk-taking could continue to keep natural gas prices supported in the near-term as traders focus on vaccination efforts and stimulus measures being doled out. The upcoming FOMC decision might also have a strong impact on commodity price action as the Fed’s policy bias could impact demand for riskier assets.

In particular, optimistic remarks confirming that the US economy is starting to recover from the pandemic could keep natural gas prices bid. Concerns about rising bond yields and the possibility of tightening policy could also mean more gains for commodities like natural gas.

Of course the upcoming inventory report would likely impact natural gas price direction during the latter half of the week, as a surprise build in stockpiles might put more downside pressure.