WTI crude oil is treading sideways and still testing support at the range visible on its hourly and 4-hour time frames. Price seems to be attempting a bearish break, though.

The 100 SMA is below the 200 SMA to confirm that the path of least resistance is to the downside or that the floor is more likely to break than to hold, possibly resulting to a drop that’s the same height as the range. This spans from $77 per barrel to nearly $80 per barrel, so the selloff might take crude oil down to $74 per barrel next.

However, stochastic is already indicating oversold conditions and looks ready to turn higher, so price might follow suit as bullish pressure picks up. RSI is also on the move up, indicating that buyers are regaining the upper hand. Both oscillators have plenty of room to climb before reaching the overbought area to indicate exhaustion among buyers.

Crude oil was dragged lower upon seeing upbeat US PMI figures, as the strong readings highlighted the possibility of seeing “higher for longer” US borrowing costs. After all, FOMC officials have been talking about the lack of progress in driving inflation down to target, so they could opt to reduce the number of planned rate cuts for the year to ensure that price pressures weaken.

However, higher interest rates would weigh on business and consumer activity, likely dragging down demand for fuel and energy commodities as well.

Still, a bounce off the crude oil range support might spur a rally back up to the nearby resistance levels at the $78.50 per barrel region or the top at $80 per barrel. Geopolitical risks might still be enough to keep the commodity supported on supply risks, although there have been signs of easing tensions lately.