WTI crude oil recently fell through its rising trend line support on the hourly time frame, indicating that a short-term reversal might be due. Technical indicators, however, suggest a continuation of the uptrend.

The 100 SMA is still above the 200 SMA to show that bullish momentum is in play, so the path of least resistance is to the upside. Support at the 200 SMA dynamic inflection point seems to be holding so far.

In addition, stochastic is just starting to pull higher from the oversold zone to signal a return in bullish pressure. Similarly RSI is turning up from the oversold region to indicate that buyers are about to take over. Both oscillators have plenty of room to climb before reaching the overbought area, so bulls could stay in play for much longer.

However, the area of interest around the broken trend line might hold as resistance, especially since it lines up with the 61.8% Fibonacci retracement level at $85.50 per barrel. A shallow correction could already hit a ceiling at the 50% Fib near $85 per barrel or the 38.2% level at $84.43 per barrel.

The EIA reported a surprise build of 0.5 million barrels in crude oil inventories, suggesting that demand was feeble during the week. This went against analyst expectations of a draw of 2.1 million barrels and the earlier reduction of 4.6 million barrels.

As it turns out, Omicron concerns likely weighed on purchases of fuel and energy commodities, as business and consumer activity took hits recently. Travel restrictions, as well as the surging case counts, likely kept spending in check as well.

With that, traders pared riskier holdings on concerns that the Fed might tighten prematurely and further weigh on economic activity in the near-term. Keep in mind that there are calls for the US central bank to hike mid-year in order to keep a lid on price pressures.