Natural Gas Price Analysis: XNG/USD turns sideways below 61.8% Fibo retracement around $2.40

• Natural Gas is showing a sideways auction around $2.38 after a vertical sell-off.
• The energy instrument has remained in the grip of bears as the market is oversupplied with natural gas.
• Natural Gas price is consolidating below the 61.8% Fibonacci retracement at $2.40.

Natural Gas price (XNG/USD) is demonstrating a back-and-forth action around $2.38 in the Asian session. The asset has turned sideways after a sheer sell-off, which is generally followed by a volatility contraction phase.

For the past two weeks, the energy instrument has remained in the grip of bears as the market is oversupplied with natural gas. The United States Energy Information Administration (EIA) has been reporting a build-up in gas storage for the past two weeks, indicating sluggish demand due to a bleak economic outlook.

Meanwhile, the US Dollar Index (DXY) has rebounded firmly and is hovering near the day’s high around 104.33 as investors are shifting their focus to June’s monetary policy meeting.

Natural Gas price is consolidating below the 61.8% Fibonacci retracement (plotted from May 05 low at $2.14 to May 19 high at $2.82) at $2.40 on a two-hour scale. The energy instrument is auctioning in a Falling Wedge chart pattern in which every pullback is seen as a selling opportunity by the market participants.

The Relative Strength Index (RSI) (14) has slipped into the bearish range of 20.00-40.00, indicating more weakness ahead.

For further move, a downside trip below May 29 low at $2.36 will drag the Natural Gas price further toward April 17 low at $2.31 followed by May 07 low at $2.25.

On the flip side, a solid recovery above 50% Fibo retracement at $2.48 will further drive the asset toward April 19 high at $2.54 and May 24 high at $2.61.

Natural Gas two-hour chart