Natural gas looks ready to resume its slide as price is bouncing off the descending trend line on its 1-hour chart. If this holds as resistance, price could retreat to the latest lows around $2.500 or lower.

Technical indicators confirm that further downside is likely, as the 100 SMA is below the 200 SMA to indicate that bearish momentum is present. Price is also finding resistance at the 100 SMA dynamic inflection point, and the 200 SMA dynamic resistance is just close by to act as another ceiling if natural gas pops higher.

Stochastic is already heading south, so price could follow suit since bearish momentum is already in play. RSI is also heading lower to confirm that selling pressure is present.

A break past the 200 SMA around $2.600, on the other hand, could suggest that a reversal is underway.

Natural gas is on weak footing as demand does not seem to be picking up so much, despite the drop in temperatures all over the US. Risk appetite has also subsided on account of another wave of increases in COVID-19 confirmed cases worldwide.

The upcoming inventory report from the Department of Energy could determine where the commodity might be headed next, as a draw in stockpiles might be enough to reassure traders that demand is supported.

A surprise build, on the other hand, could revive oversupply fears, especially since producers have increased output to make up for lost income when facilities were shut down temporarily. Recall that the winter storms led to lower production levels and limitations on shipments earlier this year.

Weather forecasts would likely impact natural gas price behavior also, as cooler temperatures could prompt increased purchases of heating commodities. On the other hand, warmer temperatures could weigh on purchases of natural gas, which would then be bearish for prices.