WTI crude oil appears to be in the middle of a correction on its uptrend as price is retreating from the highs at $54 per barrel. The Fibonacci retracement tool shows where buyers are waiting.

The 61.8% level is close to a rising trend line that’s been holding since last month and is also in line with the 100 SMA dynamic inflection point, which adds to its strength as support around the $50 per barrel major psychological mark. A shallow pullback could already find buyers at the 38.2% level just below $52 per barrel or the 50% Fib at $50.68 per barrel.

The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that the uptrend is likely to carry on. However, the gap between the indicators has gradually narrowed to reflect slowing bullish momentum.

Stochastic is heading lower to show that sellers are in control, but the oscillator is approaching oversold conditions to reflect exhaustion. Turning back up could mean that buyers are about to take over. RSI has more room to move south before indicating oversold conditions, so the correction could go on for a bit longer.

Crude oil could be in for additional volatility during the release of the inventory data from the American Petroleum Institute and Department of Energy later this week. A build in stockpiles would suggest weak demand or potential oversupply conditions, which could drag the commodity price down. On the other hand, another draw would suggest that purchases remain supported.

The commodity is on slightly shaky footing early in the week as the market focus has been on the rapidly rising number of cases of COVID-19, particularly of the new strain of the virus that emerged from the UK. Still more developments on the vaccine rollout front might keep crude oil afloat.