Natural gas could be in for a reversal from its climb, as price is breaking below its rising trend line that has been holding since mid-April. Technical indicators are suggesting that the uptrend might still resume, though.

The 100 SMA is holding as dynamic support and is above the 200 SMA to confirm that the path of least resistance is to the upside. The gap between the moving averages is widening to reflect strengthening bullish momentum as well.

Stochastic is already indicating oversold conditions or exhaustion among sellers, and turning higher would mean that buyers are taking over. If that’s the case, natural gas could climb back to the swing high or higher.

RSI has some room to head south, so selling pressure could stay in play for a bit longer until oversold conditions are met. In that case, natural gas could continue its slide below $3.000 and possibly test the next support at the 200 SMA dynamic inflection point.

Natural gas could take its cues from the upcoming inventory report from the Department of Energy. A smaller build of 60 Bcf is eyed to follow the earlier 71 Bcf increase, suggesting a pickup in demand.

Warmer weather conditions in several parts of the US likely lifted demand for cooling commodities like natural gas, especially as summer months are approaching.

A larger than expected build, however, could signal that purchases remain weak or that oversupply could be a concern. On the other hand, a surprise draw could mean more gains for the commodity as this would signal much stronger than expected demand.

Risk aversion stemming from geopolitical tensions in the Middle East could lead to some losses for higher-yielding commodities if the situation worsens, though. Easing tensions, on the other hand, could improve investor outlook and increase demand for riskier holdings like natural gas.