Natural gas continues to trend higher, at least in the short term, as it formed higher lows on the 1-hour time frame. Price is currently testing a rising trend line support that lines up with other support levels.
Applying the Fibonacci retracement tool on the latest swing low and high shows that the 50% level lines up with the rising trend line, adding to its strength as support. If so, natural gas could resume its climb to the swing high around $2.400 and beyond. A larger retracement could last until the $2.355 mark, but a break below this could lead to a continuation of the longer-term slide.
The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, support is more likely to break than to hold. Price is also trading below both moving averages to show that bearish momentum is in play. However, the gap between the indicators is narrowing to show weakening selling pressure and hint at a potential bullish crossover.
RSI is heading lower gradually to show that selling pressure is still in play, and the oscillator has crossed the center line to confirm the presence of a trend. Stochastic is also heading lower but is already closing on the oversold region to show that sellers might be exhausted. Turning higher could show that buyers are returning and that the uptrend is resuming.
According to NatGasWeather for June 12 to June 18:
“A large weather system and associated cool front will sweep across the northern and central U.S. the next several days with highs of 60s to 70s. This system will also cool Texas, the South, and Southeast into the comfortable 80s, although warming back into the upper 80s to 90s late in the week. Strong high pressure will continue to bring heat across the West with highs of upper 80s to 100s for regionally strong demand. Overall, demand will be low.”