WTI crude oil has previously broken past the resistance of a long-term descending channel, indicating its intention to stage a reversal. Price is in the middle of its retest for this broken resistance, which it must complete before heading further north.

Applying the Fib retracement tool on the latest swing low and high on the daily time frame shows that the 61.8% level is closest to the area of interest. It also lines up with an ascending trend line connecting the latest lows of price action around $48.45 per barrel.

However, the 100 SMA is still below the longer-term 200 SMA so the path of least resistance might still be to the downside. The 200 SMA dynamic inflection point is close to the 50% Fibonacci retracement level at $49.29 per barrel and might also hold as support. The 100 SMA is closer to the broken channel resistance and might be the line in the sand for an uptrend pullback.

Stochastic is still heading south to indicate that bears are in control of crude oil price for now. RSI has more room to tumble so WTI crude oil could follow suit until both oscillators hit oversold levels and turn higher. If any of the Fibs hold as support, price could test the swing high at $52.83 per barrel or head higher.

Data suggesting that crude oil production moved higher in the past week has kept a lid on the commodity’s price so far, along with the pickup in dollar demand. The ISM manufacturing PMI turned out much stronger than expected and boosted NFP expectations, as well as December Fed tightening odds.

Traders could turn their attention to the ISM non-manufacturing PMI next, along with the ADP non-farm employment data, to gauge how the September NFP reading might turn out. Data on crude oil stockpiles would also likely push prices around as a large build in inventories would put more downside pressure while another large reduction could lead to a bounce.