Crude oil has been bullish for two years, despite major restrictions in traves and other service-related businesses. WTI got close to $100 before March and the conflict in Ukraine gave it a boost, especially after the US sanctions on Russian oil. Although, Russia’s biggest markets are China, India and Europe, all of which continue to import Russian oil. As a result, oil prices reversed lower and US oil fell from $130 to $94.

Although, the 50 SMA (yellow) turned into support on the daily chart and crude oil bounced off that moving average, increasing to $116. Last week we saw another bounce off that moving average, but the 20 SMA (gray) turned into resistance and the price came back down to the 50 SMA, although it seems like this moving average is holding again, as the price bounced $5 higher. Although the bounce seems weak and it has already stopped.

EU to Place More Sanctions on Russia?

Earlier today, the Euro fell through 1.10 as EU prepares more Russia sanctions. The thinking is that these will be to close identified gaps in prior sanctions but there is also a push for new sanctions on oil and gas. Germany’s defense ministry also said gas sanctions must be discussed.

While sanctions hurt Russia, they also damage the eurozone economy and that has been a headwind for the euro. It’s down 63 pips to 1.0991, which erases all of last week’s gain. The catalyst for that gain was a shift to a more hawkish stance by some ECB members on rising inflation numbers. The setup of higher eurozone inflation and lower growth will continue to be a tough one to navigate in the FX market. Although it was enough to send oil prices higher.

US WTI Crude Oil Live Chart