WTI crude oil recently fell through a rising trend line support and is pulling up for a retest. Applying the Fibonacci retracement tool shows where sellers are waiting.

The 50% level lines up with the broken trend line to add to its strength as resistance, along with the dynamic inflection points at the moving averages. If these are enough to keep gains in check, crude oil could slump back to the swing low at $70.81 per barrel or lower.

The 100 SMA appears to be crossing below the 200 SMA to confirm that the path of least resistance is to the downside or that the selloff is more likely to pick up than to reverse. A larger correction could still reach the 61.8% Fib at $74.67 per barrel, but it looks like the 38.2% level is holding pretty well for now.

Stochastic is already starting to turn lower from the overbought zone to signal a return in selling pressure while buyers take a break. RSI still has room to climb before reaching the overbought area to reflect exhaustion among buyers.

WTI crude oil enjoyed a strong bounce upon seeing a larger than expected draw in stockpiles of 6.9 million barrels versus the estimated reduction of 4 million barrels and the earlier drop of 6.7 million barrels. This suggests that demand for fuel and energy commodities continues to pick up, even with global concerns on the Delta variant spread.

The commodity is also rebounding off losses from the FOMC minutes, which revealed that more policymakers are open to tapering sooner than later. This could put the US central bank closer to hiking interest rates, and expectations of higher borrowing costs could limit investors’ appetite for risk.

The upcoming Baker Hughes oil rig counts data might still impact crude oil direction, but it’s also important to note that the OPEC+ hasn’t quite reached an agreement on its output deal.