WTI crude oil has formed higher lows and lower highs to create a new symmetrical triangle pattern on its hourly time frame. Price is currently testing support and might be due for another bounce to the top.

If the floor around the $96 per barrel level is enough to keep losses in check, crude oil could recover to the triangle resistance around $102 per barrel. On the other hand, a break lower could set off a drop that’s the same height as the chart pattern.

The 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside or that support is more likely to break than to hold. However, oscillators are hinting that buyers could return soon.

Stochastic made it to the oversold region to reflect exhaustion among sellers and is now turning higher to suggest that buyers are regaining the upper hand. RSI is also on the move up without even reaching the oversold region, hinting that bulls are eager to return.

WTI crude oil might take cues from the upcoming FOMC decision, as another large increase in borrowing costs might spell downside for higher-yielding assets like commodities. After all, higher interest rates might dampen business and consumer activity, which could then limit purchases of fuel and energy commodities.

Some are expecting a dovish hike from the Fed, with the central bank likely specifying that they plan on slowing down their pace of tightening in order to avoid a recession. In that case, the dollar might be in for losses while riskier assets like crude oil could take advantage.

The inventory report from the EIA would likely impact crude oil volatility as well, with analysts expecting to see a larger draw of 1.5 million barrels in stockpiles.