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ING strategist Chris Turner warns that the critical support level near 1.1500 in the EUR/USD pair is facing mounting pressure due to surging oil prices, which are deteriorating Europe's trade balance. Despite narrowing interest rate differentials between the US and Eurozone, Turner anticipates limited upside potential for the pair following any relief rallies driven by the International Energy Agency (IEA). The analysis highlights the vulnerability of the EUR/USD to external energy shocks, as higher oil prices disproportionately impact energy-importing European economies. For forex traders, this development signals heightened volatility in the EUR/USD cross, particularly if oil prices continue to rise. The weakening Eurozone trade balance could pressure the EUR, making the 1.15 level a key technical watchpoint. Traders should monitor IEA interventions and OPEC+ policy shifts, which could temporarily stabilize energy markets. Broader implications include potential spillovers to other commodity-linked currencies like the Canadian and Australian dollars. Looking ahead, investors should focus on upcoming central bank decisions and energy market dynamics. The European Central Bank's response to inflationary pressures from energy costs will be critical. If the EUR/USD breaks below 1.15, it could trigger a deeper correction toward 1.13. Conversely, a sustained rebound above 1.17 might signal renewed bullish momentum. Key assets to monitor include EUR/USD, Brent Crude Oil, and the DXY USD Index.
