WTI crude oil is confirming a reversal from its uptrend, as price already broke below the neckline support around $64 per barrel. This could be followed by a drop of the same height as the chart formation.
However, technical indicators are suggesting that there’s still a chance for buyers to return. The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that support levels are likely to hold.
Crude oil is breaking below the 100 SMA dynamic inflection point, but the 200 SMA might still be able to keep losses in check around $62 per barrel.
Stochastic is heading down but already dipping into the oversold region to signal exhaustion among sellers. Turning higher could confirm that buyers are taking over. RSI has more room to head south before reflecting oversold conditions, so there could still be room for more crude oil losses.
Crude oil is under downside pressure on account of risk-off flows stemming from the surge in COVID-19 cases and fatalities in India. Worsening numbers might prompt another wave of lockdown measures in several parts of the globe, which would mean lower demand in fuel and energy commodities again.
The pipeline cyberattack did not seem to have a material impact on crude oil price action, although the shortages in gasoline in several US states is worth keeping tabs on.
The upcoming US retail sales report could impact overall market sentiment and therefore commodity movements. Strong numbers could mean that the US consumer sector is staying resilient despite the slower than expected pickup in employment for the same month.
Weaker than expected retail sales data, on the other hand, could make investors worried that the US economy is still reeling from the impact of the pandemic.