As shown on the XNG/USD chart, today, the price of natural gas fell below $2.16 for the first time since 8 August.

Bearish sentiment is being driven by the fact that: → This is the last week of summer. Gas consumption typically decreases in mid-September as the use of air conditioning declines; → Gas storage levels are abundant. According to Reuters, current stock levels exceed the seasonal average by 12%.

A technical analysis of the XNG/USD chart provides several arguments suggesting that bears hold the upper hand in the market:

→ Price action is forming a descending channel, shown in red. The upper boundary of the channel acted as resistance, with the price forming a bearish rounding reversal pattern (as indicated in blue).

→ After a large bearish candle on 22 August, the resistance level at $2.24 became more significant.

→ Support lines, forming a fan shape, are being broken one by one, with increasingly shallow angles indicating weakening demand.

Nevertheless, bulls have an opportunity to turn the situation around by using support from the trendline (shown in yellow) at least in the short term.

However, in the longer term, if the supply-demand balance remains unchanged, there is reason to believe that the price of natural gas on the XNG/USD chart may continue its downward trend within the red channel.

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