Natural gas might be in for a retest of the broken descending trend line resistance on its 4-hour time frame, as price is trading inside a newly-forming rising channel.
The Fib retracement tool shows that the channel support lines up with the 61.8% Fib around the former trend line. This is also near the dynamic support at the moving averages, which could add to its strength as a floor near $6.000.
The 100 SMA is crossing 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.
A shallow pullback could find support at the 38.2% Fib around $6.800 or the 50% level at $6.560. If any of these hold as support, natural gas could resume the climb to the swing high at $7.544 or higher.
Stochastic is on the move down to show that selling pressure is in play and could stay on until oversold conditions are met. RSI has more room to head south, so price could follow suit until sellers are exhausted.
Natural gas is enjoying support thanks to falling temperatures all over the globe. This ramps up purchases of heating commodities, which might translate to reductions in stockpiles in the coming months.
Note that some weather agencies are reporting lower than usual temperatures during the start of the winter season, so demand could pick up sooner and stay elevated for much longer.
Earlier on, the Department of Energy reported a smaller reduction in natural gas inventories, leading to a slight dip for the commodity price. Still, geopolitical tensions between Russia and Europe are reviving fears of an energy crunch, as the former is threatening to cut off the last of its supply to the region.