WTI crude oil is finding resistance at the top of its rising channel on the 1-hour chart and looks ready to head south. Price is bouncing off the mid-channel area of interest, but technical indicators suggest that further losses are in the cards.

The 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside or that resistance is more likely to hold than to break. Price is also edging below both moving averages, so these could hold as dynamic resistance.

Stochastic is heading lower to show that there is some selling pressure in play, and the oscillator has plenty of room to move south before reaching the oversold region. RSI is on middle ground to reflect consolidation, so crude oil prices might still move sideways.

Crude oil found some support from the EIA report which indicated a draw of 9.9 million barrels versus the projected increase of 1.6 million barrels and the earlier rise of 4.4 million barrels. The FOMC decision likely contributed to risk-on flows as well since the central bank signaled they’re far from tightening monetary policy.

The upcoming release of the US advance GDP reading might impact overall market sentiment as it would show whether or not the US economy was hit harder by the pandemic than initially thought.

Expectations are for a growth figure of 4.2% which would pale in comparison to the earlier 33.4% expansion but might still spur risk-on flows. Stronger than expected results could signal positive prospects in the coming quarters as it would reflect resilience among businesses and consumers.

As in recent months, risk sentiment would likely stay sensitive to headlines concerning the pandemic, particularly when it comes to the vaccine rollout and stimulus efforts. Positive developments on both fronts could keep traders hungry for riskier assets like commodities.