WTI crude oil continues to tread higher but is currently hitting a roadblock at the top of its rising channel on the 4-hour time frame. This could pave the way for a pullback to the channel bottom or at least until the mid-channel area of interest.

Applying the Fibonacci retracement tool on the latest swing high and low shows the potential correction levels. The 38.2% retracement level lines up with the $50 per barrel area while the 50% level is at $49.35 per barrel. The 61.8% Fibonacci retracement level is at the channel support near $48.50 per barrel.

The 100 SMA is above the longer-term 200 SMA to signal that the path of least resistance is to the upside, which means that the uptrend is more likely to continue than to reverse. Also, the 100 SMA is around the 38.2% Fib to add to its strength as support while the 200 SMA is closer to the 61.8% Fib. The actual channel support is closer to $48 per barrel and might be the line in the sand for this uptrend.

Stochastic is pulling up without even hitting oversold levels, indicating that buyers are eager to get back in the game. RSI has room to head lower, though, so bears might still be in control from here. If any of the Fib levels hold as support, crude oil could make its way back up to the swing high at $52.75 per barrel or higher.

Traders continue to hope for an extension in the OPEC output deal that could lend more upside pressure on WTI crude oil until the middle of 2018. Around this time, global demand is expected to be picking up, putting additional bullish factors for the commodity.

However, the prospect of Fed tightening is keeping the dollar strongly supported and commodities slightly weaker on expectations of slower business and consumer activity. For now, oversupply doesn’t seem to be an immediate issue as the American Petroleum Institute and the Energy Information Administration both reported surprise draws in stockpiles for the other week.

Looking ahead, the focus is still on crude oil inventories and also on the upcoming NFP release, which might influence Fed rate hike expectations.