WTI crude oil has taken a sharp hit after failing to sustain its climb past the swing high near $118.17, with price currently sliding to the $96.68 area.

The commodity had been cruising higher within a rising channel formation, but the recent rejection from the channel top has opened the door for a deeper corrective pullback. The Fibonacci retracement tool drawn from the latest swing low to the swing high shows where more buyers could be waiting to join in.

The 38.2% Fib level sits at $105.26, which lines up closely with a prior consolidation area and could attract the first wave of dip buyers. A deeper correction could bring price down to the 50% Fib at $101.28, a key psychological level that also coincides with the channel mid-section.

If selling pressure persists, the 61.8% Fib at $97.29 is the next critical floor to watch, sitting just above current price levels and potentially acting as the line in the sand for a bullish pullback.

The 100 SMA (blue) remains above the 200 SMA (red), confirming that the path of least resistance is still to the upside and that the broader climb is more likely to gain traction than to reverse. Both moving averages are sloping higher and could serve as dynamic support on any extended dips.

Stochastic has plunged sharply into the oversold region, suggesting that sellers may be overextending themselves and that a bounce could be on the horizon. RSI has also dropped aggressively toward the oversold area, leaving room for a recovery as buyers look to step back in.

If any of the Fibonacci levels manage to keep losses in check, WTI could resume the rally toward the channel top and retest the $118.17 swing high. A break below the 61.8% Fib, however, could expose the 100% extension near $84.38.

The US-Iran ceasefire agreement has brought temporary reprieve for supply concerns, triggering an unwinding of bullish oil positions while tensions ease. However, flaring conflict could keep traders on edge about global production and shipments, possibly keeping prices elevated.