Natural Gas (NATGAS/USD) Price Technical Analysis for Sept. 22, 2022

Natural gas is still trading inside its descending channel and is moving around the bottom half of the range. Price appears to have completed a quick pullback to an area of interest and is due to resume the slide.

A higher correction, however, might still test the upside barriers around the Fibonacci retracement levels. The 50% Fib is at $8.361 and the 61.8% level is at $8.579 near the top of the channel. If any of these hold as resistance, natural gas could carry on with its downtrend.

The 100 SMA is below the 200 SMA to confirm that the path of least resistance is to the downside or that the selloff is more likely to resume than to reverse. The moving averages also seem to have held as dynamic resistance on the latest pullback.

Stochastic is pointing down to indicate that bearish pressure is in play, and the oscillator has a bit of room to drop before reflecting oversold conditions. RSI is also heading south, so natural gas could follow suit until the oscillator reaches the oversold region.

Commodities sold off after the FOMC decision, as the Fed hiked interest rates by 0.75% as expected and reiterated their plans to keep tightening in order to combat inflation. This could potentially keep a lid on business and consumer activity, which then weighs on demand for commodities like natural gas.

Traders might also be positioning ahead of the inventory numbers from the Department of Energy today. Analysts are expecting a build of 97 Bcf versus the earlier increase of 77 Bcf, reflecting slowing demand due to cooling temperatures.

Still, purchases could pick up sooner rather than later, as businesses might be stockpiling ahead of the winter season. Note that Putin just announced a partial mobilization of the military, which might then translate to more uncertainty the energy market.

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