Natural gas rallied sharply off its late-July lows near $2.639, tracing a rising wedge that eventually gave way to a breakout toward the $3.018 swing high.
Since tagging that peak, price has pulled back and is now testing the broken resistance zone that capped gains through most of August, raising the question of whether old resistance can flip into fresh support.
The Fibonacci retracement tool, drawn from the $2.639 low to the $3.018 high, highlights where dip-buyers may look to step back in. The 38.2% level at $2.873 has already been tested and briefly breached, with price currently hovering around $2.889.
A deeper slide could bring the 50% Fib at $2.828 into play, which lines up closely with the shaded former-resistance-turned-support zone. A more aggressive correction may stretch as far as the 61.8% Fib at $2.784, an area that could serve as the line in the sand for the broader uptrend.
On the moving average front, the 100 SMA has crossed above the 200 SMA, confirming that the path of least resistance remains tilted to the upside for now. Price is still trading above both averages, so a pullback into this zone could find dynamic support if bulls step in.
Momentum readings, however, hint at some near-term fatigue. Stochastic is curling lower after reaching overbought territory, suggesting sellers could keep applying pressure until the oscillator works its way back toward oversold conditions. RSI has slipped from the mid-50s and is drifting toward the midline, reflecting fading bullish momentum without yet flipping outright bearish.
If the Fib confluence zone holds, natural gas could resume its climb toward the $3.018 swing high or beyond. A decisive break below the 61.8% level, on the other hand, would threaten the broader uptrend and could open the door back toward the triangle breakout point near $2.639.
Natural gas could find support from renewed Middle East tensions sparking a fresh wave of supply concerns for crude oil and other energy commodities, though USD moves from the US CPI release could also impact direction.