WTI crude oil broke above its range resistance to signal that a climb of the same height as the chart pattern is about to follow. This range spans $62 per barrel to $66.50 per barrel.

The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that the climb is more likely to gain traction. Crude oil is trading above both indicators as additional confirmation of bullish pressure.

However, the gap between the moving averages seems to be narrowing to reflect weakening bullish pressure. Stochastic is also hovering around the overbought zone to signal exhaustion among buyers, and turning lower would mean a return in selling pressure.

RSI also looks ready to head south without reaching the overbought zone, suggesting that sellers are eager to take over. If that happens, crude oil could slide back to the support levels at the moving averages or the range support at $62 per barrel.

Crude oil saw a larger than expected reduction of 1.7 million barrels in stockpiles versus the projected drop of 1.0 million barrels. This was also an improvement over the earlier gain of 1.3 million barrels, suggesting stronger demand for the commodity.

Next up, the commodity could take its cues from risk sentiment as influenced by US inflation data. The core PCE price index, which is said to be the Fed’s preferred inflation measure, is up for release and likely to show stronger price pressures.

In turn, this could boost Fed tapering and tightening speculations, which would lift expectations of borrowing costs down the line. In that case, higher-yielding assets could take hits as higher interest rates would dampen business and consumer activity later on while also driving up the value of the US currency.

On the other hand, weaker than expected results could be positive for risk-taking and commodities like crude oil.