WTI crude oil is still in correction mode but is already testing the resistance of its descending channel on the short-term charts. Price could resume the selloff to the downside targets from here.

The mid-channel area of interest could serve as near-term support around $63 per barrel while stronger selling pressure could take it down to the channel bottom at $60 per barrel.

The 100 SMA is below the 200 SMA to confirm that the path of least resistance is to the downside or that the selloff is more likely to resume than to reverse. The moving averages also line up with the channel top to add to its strength as a ceiling.

Stochastic has been indicating overbought conditions for quite some time, which means that buyers are exhausted and willing to let sellers take over. The oscillator appears to be heading south, so price could follow suit while selling pressure is in play.

A break past the $70 per barrel mark around the 200 SMA dynamic resistance, on the other hand, could signal that a reversal from the downtrend is in order.

The latest EIA inventories report revealed a larger than expected drop of 3 million barrels in stockpiles versus the projected draw of 1.9 million barrels. This is close to the earlier reduction of 3.2 million barrels, suggesting that demand remains supported.

Market sentiment could push crude oil prices around in the coming days, particularly as traders turn their attention to the Jackson Hole Symposium. Fed head Powell could clarify the central bank’s taper timeline, which might then provide market watchers some clues on when borrowing costs might be increased.

The prospect of seeing a rate hike from the US central bank soon might bring risk-off flows back to the markets, weighing on commodity prices as traders anticipate slower business activity as a result.