EURUSD still feeling the pressure of the year-long downtrend. FED is tightening its policy way ahead of ECB and the dollar is ruling the other currencies so far. But ECB’s rate hike potential is much more than FED and mostly, it has not been realized yet. But the main problem, causing EUR weakness is energy prices.

Putin’s latest remarks about the probability of fully shutting down gas and oil exports put ECB on the spot. Eurozone economies most likely can’t avoid recession in the coming months and ECB is in a tight spot between rising inflation and the slowing economy. On top of all, Putin is now looking at grain exports to EU countries from Ukraine, which might take the food prices to another level too. EU, food production has already taken a hit because of drought and surging energy and fertilizer costs.

A lot of these concerns cause some members to stay more dovish. A 75 basis points hike is expected with a %69 probability but a surprise 50-point hike is not off the table in today’s meeting. EURUSD is still in the downtrend. Unless it is broken, upside moves continue to be selling opportunities. For bulls to take over, traders can follow breakouts above 1.0220 and 1.0340 resistances. EURUSD has huge upside potential but the timing might still be off for upside moves to begin.

For a shorter-term outlook, today’s meeting is expected to increase volatility. 1.005 – 1.009 can be followed as resistances today. A 50-point hike and dovish ECB surprise, on the other hand, might put the 0.9875 support at risk. A downside break could lead prices to the lower line of the trend channel in the coming days.