Natural gas continues to trade sideways in a tight range, bouncing off support around 2.950 and resistance at 3.050. Price looks prime for another test of the range resistance.
The 100 SMA is below the longer-term 200 SMA to suggest that the path of least resistance is to the downside or that the resistance is more likely to hold than to break. In that case, another dip to support may be underway.
RSI is on middle ground but seems to be treading higher. This oscillator has some ground to cover before hitting the overbought zone, which suggests that buyers still have some energy, at least for a test of the range top. A move past this area could hit a ceiling at the 200 SMA dynamic inflection point around 3.100.
Stochastic is heading up to indicate the presence of bullish pressure but this oscillator is nearing the overbought zone to signal a return in bearish momentum soon. Stronger selling pressure could even lead to a break below the range support and a drop that’s at least the same height as the chart formation. Similarly a break above the top could spur a climb of the same height.
Natural gas is holding its ground as it awaits stronger market catalysts that could dictate direction. There wasn’t much action coming from the FOMC statement as Powell’s remarks in the previous weekend may have preempted the reaction.
The next potential mover might be the mid-level talks between the US and China as this would have repercussions on global trade. Easing tensions could prove positive for business sentiment and commodities demand, which might spur gains for natural gas. On the other hand, worsening tensions even with their 90-day tariffs truce declared late last year could bring risk-off flows back in the markets.