WTI crude oil has been consolidating inside an ascending triangle on its 4-hour time frame but seems to be breaking below support. If that’s the case, the commodity could fall by the same height as the chart formation.

Technical indicators, however, are suggesting that buyers could still return from here. The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that support is likely to hold. Price is also finding support at the 200 SMA dynamic inflection point.

Stochastic is pulling up from the oversold region to indicate that buyers are taking over while exhausted sellers take a break. RSI also seems to be heading up without reaching the oversold region, hinting that bulls are eager to return.

The massive selloff among risky holdings in the past sessions likely dragged crude oil lower, as the FOMC minutes suggested that policymakers could be looking to taper soon.

The US dollar advanced across the board, weighing on higher-yielding holdings like cryptocurrencies and commodities for most of the New York session, as the Fed could act to control inflation soon. This differs from Powell’s earlier statements that they’re not looking to adjust policy in the near-term.

EIA crude oil inventories showed a slightly smaller than expected build of 1.3 million barrels versus the projected increase of 1.5 million barrels, easing oversupply fears somewhat. This could also be reflective of stronger demand as more businesses have reopened in more cities.

However, risk-off flows stemming from the tensions in the Middle East could keep a lid on commodity price gains as this dims investor outlook for the global economy. In addition, the rise in COVID-19 cases and fatalities in India is still keeping traders cautious for the time being.