Natural Gas Price Analysis: Bulls look hopeful due to soaring temperature in Texas

• Natural Gas price is hovering near the horizontal resistance of the Ascending Triangle pattern at $2.44.
• Investors are awaiting the natural gas inventory data by the US EIA for the week ending June 09.
• Soaring temperatures in US Texas would increase the usage of air-conditioning.

Natural Gas price (XNG/USD) has shown a recovery move after a minor correction to near $2.40. The energy component is expected to deliver more upside amid a solid demand outlook. The Electricity Reliability Council of Texas (ERCOT) said Tuesday that due to soaring temperatures this week, the usage of air-conditioning might climb in Texas to a record 80.3 gigawatts.

Investors are going to keep their entire focus on the natural gas inventory data by the United States Energy Information Administration (EIA) for the week ending June 09. Last week, the US EIA reported a jump in natural gas inventory by 109 billion cubic feet (bcf).

Natural Gas price is auctioning in the Ascending Triangle chart pattern on an hourly scale, which indicates a sheer contraction in volatility. Upward-sloping trendline of the aforementioned pattern is plotted from June 01 low at $2.18 while the horizontal resistance is placed from May 31 high at $2.44.

The 50-period Exponential Moving Average (EMA) at $2.38 is providing support to the Natural Gas bulls.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00 range, which indicates a non-directional performance.

Going forward, a decisive break above May 31 high at $2.44 by the Natural Gas price will result in a breakout of the volatility contraction and will open doors for May 23 low around $2.51 and May 24 high at $2.61.

In an alternate scenario, a decisive drop below June 06 low at $2.24 will drag the asset toward June 01 low at $2.18. A break below the latter will expose the asset to May 05 low around $2.10.

Natural Gas hourly chart