WTI crude oil is pulling back to an area of interest visible on its long-term time frames, and this broken support might hold as resistance moving forward. Technical indicators suggest that the selloff is likely to resume.

In that case, price could slump back to the swing low or at least until nearby support areas. The 100 SMA is below the 200 SMA to confirm that the path  of least resistance is to the downside or that the resistance is more likely to hold than to break.

Crude oil is testing resistance at the 100 SMA at the moment but might still pop higher to the 200 SMA dynamic inflection point, which might be the line in the sand for a pullback.

Stochastic is already indicating overbought conditions or exhaustion among buyers. Turning lower could mean that selling pressure is returning and that the downtrend is about to resume. RSI has a bit of room to climb before reaching the overbought zone, so there could be some bullish pressure left.

Crude oil is enjoying some upside despite a return in risk-off flows stemming from the political chaos in the US Capitol yesterday. The EIA report revealed a larger than expected draw of 8 million barrels in stockpiles versus the estimated 2.8 million barrel drop or the earlier 6.1 million barrel reduction, reflecting stronger demand for the commodity.

The upcoming NFP release might impact overall market sentiment, which in turn affects crude oil price action. Strong data could confirm that the US economy is starting to recover from the impact of the pandemic, likely spurring increased demand for riskier assets like commodities.

On the other hand, weak results could mean that the economy is facing more challenges to business and consumer spending ahead, which would weigh on demand for fuel and energy down the line.