WTI crude oil continues to trend inside its descending channel on the 1-hour chart and is in the middle of a correction. Price seems to be finding resistance at the 61.8% Fibonacci retracement level.

A larger pullback could still test the channel top around $53 per barrel. However, the moving averages are also holding as dynamic resistance at the moment, so crude oil could retreat down to the swing low at $51.44 per barrel or the channel bottom from here.

The 100 SMA still seems to be slightly above the 200 SMA for the time being, suggesting that there might still be some gains in the cards. Then again, the moving averages are oscillating to reflect range-bound action.

Stochastic is turning lower to indicate that sellers are returning while buyers are taking a break. The oscillator has plenty of room to move down, so sellers could stay in the game for much longer. RSI is on the move down without reaching the overbought zone, suggesting that bears are eager to take over.

Crude oil could be in for a lot of volatility as the FOMC decision and US advance GDP release are on this week’s docket. These reports tend to have a huge impact on market sentiment and commodity price action.

Dovish remarks and a downbeat GDP could mean that the US economy was hit harder by the pandemic than initially thought, and traders are wary of more weaknesses down the line as the new virus strain came to light. On the other hand, hawkish commentary and an upbeat GDP could signal that a recovery is still in play, prompting stronger demand for fuel and energy commodities.

Of course the API and EIA reports could also impact crude oil price action for the week, as a draw in stockpiles would reflect sustained market demand despite headwinds.