WTI crude oil recently made a fresh break below a short-term ascending channel to signal that further losses are in the cards. However, price is also nearing the bottom of a long-term ascending channel visible on the daily time frame.

If support holds, the commodity could still stay in an uptrend and recover to the top or at least until the mid-channel area of interest. The 100 SMA is still above the longer-term 200 SMA after all, so the path of least resistance is to the upside. This means that the uptrend is more likely to resume than to reverse.

RSI is on the move up but appears to be hesitating on its climb. This suggests that sellers are still trying to fight to stay in control. Similarly stochastic is attempting to pull out of the oversold region to signal a return in bullish pressure but seems to be having second thoughts. Also note that the gap between the moving averages is narrowing slightly to reflect slower bullish momentum.

The latest report from the Energy Information Administration showed a surprise build in stockpiles of 3.8 million barrels versus the estimated decline of 2.4 million barrels. This added to downside pressure on crude oil, which is already reeling from trade war tensions between the US and China.

Word on Washington is that Trump wants to see 25% in tariffs for $200 billion worth of Chinese goods, higher than the initial 10% planned. This could force China to introduce worse countermeasures in retaliation, bringing more uncertainty to businesses.

Traders could look to the Baker Hughes oil rig counts next to gauge supply and demand levels in the US, but the bigger catalyst might be Beijing’s reaction to Trump’s tariffs plans. The NFP release on Friday could also affect dollar price action and market sentiment as well.