Natural Gas (NATGAS/USD) Price Technical Analysis for Sept. 17, 2020

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Natural gas is carrying on with its slide on the 4-hour time frame after recently bouncing off the resistance. Price is down to the 50% Fibonacci extension level around $2.200 but might still go for the next downside targets.

The 61.8% level is at $2.165 then the 76.4% level lines up with the swing low. Stronger selling pressure could take natural gas down to the full extension at $2.040.

The 100 SMA is above the longer-term 200 SMA, though, so the path of least resistance could be to the upside. In other words, support levels are more likely to hold than to break. Then again, the gap between the indicators has narrowed to indicate weaker bullish momentum and a potential bearish crossover.

Stochastic is on the move down so price could follow suit while sellers have the upper hand and before oversold conditions are seen. RSI is also heading south to reflect the presence of selling pressure, and the oscillator has room to head lower before reflecting oversold conditions.

Natural gas is once again on weak footing as traders are bracing for a big increase in output after the weather disturbances pass. Production is hampered along the Gulf of Mexico, which likely leads to temporary shut-ins for the time being.

Cooler weather conditions in the coming months could still usher in stronger purchases of heating commodities, so producers would likely ramp up output to anticipate higher demand. This could spur a build in stockpiles in the next few weeks, which might mean a bit more downside pressure on prices.

Apart from that, overall market sentiment would likely dictate where commodities are headed. Positive developments and the possibility of more stimulus could support business and consumer optimism, which might keep natural gas prices afloat. More geopolitical tensions, on the other hand, could spell more losses.

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