WTI crude oil continues to hover around the bottom of its descending channel that bulls appear eager to defend. Updating the Fibonacci retracement levels on the latest swing high and low shows the potential correction zones.

The 100 SMA is still below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the downtrend is more likely to resume than to reverse. The gap between the moving averages is also widening to reflect strengthening selling pressure.

The 200 SMA is in between the 50% and 61.8% Fib levels to add another layer of resistance around the $68 per barrel area. A larger pullback could last until the channel top at $69 per barrel.

RSI is still heading higher to show that buyers have energy left and could keep propping crude oil up. However, the oscillator is also approaching overbought levels to signal exhaustion among bulls and a return in selling pressure soon. Stochastic has already reached the overbought region and could be due to turn down soon, so crude oil might follow suit.

Crude oil was bogged down by the OPEC downgrade on global demand for 2019 and production cuts from Saudi Arabia that kept the cartel’s overall output in check. Apart from that, persistent risk-off flows stemming from the crisis in Turkey is also weighing on commodities and other riskier assets.

Looking ahead, data from the API and EIA could push crude oil around, although it’s also worth noting that Baker Hughes reported a gain in drillers and data from Cushing showed an increase in stockpiles. A large gain in inventories could put more weight on crude oil and possibly force it to slump below the channel.

On the other hand, a large draw would reveal that demand is keeping up with production and that oversupply isn’t an immediate threat.