WTI crude oil is still in recovery mode after its breakdown and sharp drop towards the end of March. Price is now moving above an ascending trend line connecting the latest lows of price action on the 1-hour time frame, marking the start of an uptrend.

The 100 SMA has crossed above the longer-term 200 SMA on this chart, also signaling that the path of least resistance is to the upside or that more gains are in the cards. However, stochastic is still on the move down so crude oil price might follow suit. RSI is also turning lower from the overbought area to suggest a return in selling pressure.

This could spur a pullback to the trend line support around $50.50 or a larger correction to the 100 SMA dynamic support at $49.50. A larger retracement might last until the 200 SMA at $48.50 or all the way down to the longer-term channel bottom at $47.50. However, a break below this short-term trend line could draw stronger bearish pressure to the mix.

The slower than expected build in inventories for the other week was the main reason for the oil price bounce, along with talks that the OPEC is gearing up to extend its output deal until the end of the year. This reduction in production could ease oversupply concerns for much longer and keep prices supported even as demand falters.

Keep in mind that the US central bank just hiked borrowing costs, which could dampen spending and business activity worldwide. This could then put a lid on production and energy demand, putting some downside pressure on crude oil. The Fed is slated to hike rates at least two more times this year, dealing fresh downside risks to crude oil.

This week, the next set of updates on crude oil stockpiles from the American Petroleum Institute and the Energy Information Administration could provide clues on how WTI crude oil price could fare. Another larger than expected buildup in inventories could renew oversupply concerns and trigger another sharp drop for the commodity. On the other hand, a reduction in stockpiles or a small buildup could allow the commodity to stay in recovery mode. US oil rig count data could also influence price action.

Apart from all that, market risk sentiment could have a strong say in commodity movements for the rest of the week, especially since it’s the start of a new quarter and fresh themes are expected to come into play.