Natural gas has broken above its ascending channel resistance on the short-term time frame, signaling that a steeper uptrend could be in the cards. Price is currently trading around $3.298, though a brief pullback to gather more bullish momentum could be likely before the next leg higher.

The 100 SMA is positioned above the 200 SMA to confirm that the path of least resistance is to the upside or that the climb is more likely to gain traction than to reverse. The gap between the moving averages is widening, reflecting strengthening bullish pressure. Price is also trading above both indicators, so these could hold as dynamic support on any dips.

Stochastic is hovering near the overbought zone to suggest that bullish momentum could be waning in the short term, and turning lower would point to a potential correction. The oscillator has plenty of room to slide before reaching oversold conditions, which means sellers could stay in control during a pullback.

RSI is also approaching overbought territory but hasn’t reached extreme levels yet, so there could still be some room for gains while buyers maintain the upper hand.

Natural gas could take cues from upcoming inventory reports, as a smaller-than-expected build could reinforce expectations of sustained demand heading into the cooler months while a larger increase could support the view of lower consumption.

Meanwhile, the dollar’s recent weakness following dovish Fed commentary could provide additional tailwinds for commodity prices, potentially allowing natural gas to sustain its breakout momentum toward new highs.

Traders could also hold out for the release of the US NFP report on Friday, as the outcome of the employment data could have strong implications on Fed policy and overall risk sentiment. Weaker than expected results could stoke rate cut expectations, which could prop up higher-yielding assets like commodities.