WTI crude oil is retreating off its highs, which happen to coincide with the top of a newly-forming ascending channel on its 4-hour chart. A pullback could lead to a test of nearby support levels marked by the Fibonacci retracement tool.

The 61.8% level lines up with the channel bottom around $61 per barrel while the 38.2% level is close to the middle of the channel at $62 per barrel. Technical indicators are suggesting that further losses could be in the works for now.

The 100 SMA is below the 200 SMA to show that the path of least resistance is to the downside or that bearish momentum is present. The 100 SMA lines up with the channel bottom to add to its strength as support.

The gap between the moving averages is narrowing to reflect slowing bearish pressure and a potential bullish crossover. Stochastic has room to move down, though, so bearish pressure could stay in play for a bit longer, possibly until the commodity tests major support levels.

RSI is just heading south from the overbought zone and has plenty of room to move south before reflecting exhaustion among sellers.

Crude oil gapped lower and is on weaker footing as concerns about setbacks in vaccination programs and a fresh surge in COVID-19 cases weighed on global outlook. After all, this could delay the reopening of some economies and many businesses, which could dampen demand for fuel and energy commodities.

The upcoming inventory reports from the American Petroleum Institute and Energy Information Administration could bring more volatility for the commodity. A large draw in stockpiles would suggest that demand remains supported, even as the OPEC has agreed to gradually increase output.

On the other hand, a surprise build could mean downside for crude oil since this would mean that purchases remain weak.