WTI crude oil could be in for a steeper selloff as price broke below the neckline of a head and shoulders pattern on the 4-hour time frame. This chart pattern spans $46 to $50 so the resulting drop could be of same size.

The 100 SMA is starting to cross below the longer-term 200 SMA so the path of least resistance could be to the downside. These moving averages are close to the broken neckline and might add to its strength as a ceiling in the event of a pullback.

Stochastic is pulling up from the oversold region, though, so a return in bullish momentum is possible. RSI is also approaching oversold levels to signal profit-taking among sellers and a potential continuation of the previous uptrend. In that case, WTI crude oil could recover to $50 or higher, depending on market catalysts.

Hurricane Harvey is currently weighing on crude oil gains as refinery shutdowns are keeping plenty of the commodity in stockpiles. The tropical storm is projected to stay much longer than initially anticipated and the recovery efforts could also take some time to complete before refinery operations are restored.

The Energy Information Administration is set to print its inventory data and a drop of 1.8 million barrels is eyed. If the actual figure comes in line with expectations or even prints a larger draw, crude oil could enjoy a return in bullish pressure. On the other hand, a huge buildup could revive oversupply concerns, especially if this is repeated in the following weeks.

Market sentiment is also not on crude oil’s side at the moment as nuclear missile threats from North Korea remain a prevailing concern. Earlier today, the hermit nation launched a missile that landed just past the northern coast of Japan, leading many to worry that they are preparing for a larger launch to Guam.

Next up, the US NFP is due and this could also have a huge impact on sentiment and commodity prices. Stronger than expected data could revive Fed tightening expectations and weigh on crude oil while weak figures could keep commodities afloat.