WTI crude oil recently broke above a falling trend line to signal that a reversal from its slide is due. Price appears to have completed a retest of the broken resistance, which held as support.

Price could be aiming for the next upside targets marked by the Fibonacci extension tool. The 38.2% level is at $45.41 per barrel then the 50% level is at $45.66 per barrel. Stronger bullish momentum could take crude oil up to the 61.8% level at $45.90 per barrel or the 76.4% level at $46.20 per barrel. The full extension is at $46.68 per barrel.

The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that the climb is likely to carry on. The 100 SMA also coincides with the broken trend line to add to its strength as support.

However, the gap between the indicators has narrowed to reflect slowing bullish momentum and a potential bearish crossover. Stochastic is also heading lower to show that bearish momentum is present, and the oscillator has enough room to move south before reaching oversold conditions. Similarly RSI is pointing down to confirm that bears have the upper hand.

Crude oil could be on stronger footing as risk appetite has been improving in the markets. However, the lack of an agreement among OPEC+ leaders and the smaller than expected draw in stockpiles could keep gains in check.

Recall that the EIA reported a reduction of 0.7 million barrels instead of the estimated reduction of 1.7 million barrels, suggesting that demand hasn’t been as strong. Either that or oversupply could remain a concern, particularly if lockdown measures aren’t eased soon.

Still, positive vaccine developments have been bullish for commodities as this leads traders to anticipate an earlier return to normal business conditions.