WTI crude oil is trending up with its higher lows above an ascending trend line on the 1-hour time frame. Price could be due for a pullback to this support area that lines up with the Fibonacci retracement levels.
The 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, the uptrend is more likely to gain traction than to reverse. Price could retreat to the 61.8% Fib at the $55.50 per barrel mark before resuming its climb.
A shallow correction could find support at the 50% Fib at $55.85 per barrel or the 38.2% level at $56.25 per barrel. If any of the Fibs are able to keep losses in check, price could resume the climb to the swing high at $57.50 per barrel.
RSI is heading down after recently making its way from the overbought zone, indicating that selling pressure might be picking up. Stochastic is also moving south to show that bearish momentum is in play.
The commodity is enjoying some short-term upside as it recovers from the selloff in the previous weeks. However, inventory data is reflecting a build of 3.7 million barrels to 443 million, compared with analyst expectations for a decrease of 2.8 million barrels, based on the report from the American Petroleum Institute.
This could mean that a build might also be reported by the Energy Information Administration, which could further put downside pressure on prices. Keep in mind that traders are already on edge, given how trade tensions have picked up between the U.S. and China again.
Still, a surprise draw in stockpiles could mean another leg higher for the commodity as this might assure traders that demand remains healthy despite weaker business sentiment.