WTI crude oil is still trending lower inside a short-term descending channel and appears to be trying to break below support. Keep in mind that the commodity already tumbled below the longer-term ascending channel on the daily chart to suggest that a downtrend is in order.
The 100 SMA crossed below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. This suggests that the selloff is more likely to resume than to reverse. In addition, these moving averages are close to an area of interest at the broken long-term channel and the top of the smaller channel.
RSI is starting to pull up from the oversold region to signal that buyers are getting back on their feet while sellers take a break. Similarly stochastic looks ready to turn higher after reaching oversold levels. This also signals that bullish pressure could return and possibly lead to a bounce to the $70 per barrel area of interest.
Crude oil drew some support from updates that China is removing the commodity from their list of targeted US goods for higher tariffs. Still, both nations are gearing up to impose these trade measures by August 23, bringing uncertainty to businesses and likely weighing on demand for energy.
Apart from that, the overall risk aversion in the financial markets is hitting commodities like crude oil hard. To top it off, the US EIA reported a smaller than expected draw in stockpiles of 1.4 million barrels, half as much as the estimated reduction of 2.8 million barrels. This keeps oversupply concerns in play in the US market, and the Baker Hughes oil rig counts report could provide more insight on future output.
The commodity could continue to take cues from market sentiment from here, likely paying extra close attention to updates on the US-China spat, as well as the tension between Saudi Arabia and Canada.