WTI crude oil bounced off the bottom of its ascending channel on the 1-hour time frame and is closing in on the top. Price could hit the resistance at the $71 per barrel mark before profit-taking happens.

The 100 SMA is above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. This means that the uptrend is more likely to continue than to reverse, possibly even allowing crude oil to bust through the top of its channel.

However, stochastic is already in overbought territory to show that selling pressure could return soon. RSI has some room to climb so WTI crude oil could follow suit. If resistance holds, another test of support around $68.50 per barrel could take place.

Crude oil initially dipped on Trump’s announcement to quit the Iran deal as speculators likely booked profits on their earlier long positions. However, support held strongly as investors likely reestablished their positions. After all, sanctions imposed on Iran could limit its ability to bring its crude oil output to the international market.

Keep in mind, however, that risk aversion could cap these commodity gains if traders flock back to the safe-haven dollar. At the same time, Saudi Arabia has hinted that it could increase its output, possibly reviving oversupply concerns.

For now, the private inventory data from API has indicated a surprise draw in stockpiles, which was also one of the factors that triggered the strong bounce in crude oil earlier on. The official data from the Energy Information Administration could show similar results, further easing concerns of a supply glut and keeping the uptrend intact.

Looking ahead, the Baker Hughes oil rig counts could be the next catalyst for crude oil direction, pending further updates on the Iran situation. Escalating tensions could ultimately bring risk-off flows back in.