Surging Energy Prices Fuel EUR/USD Inflation Bets Pre-ECB

Energy prices climbing back into focus are complicating the eurozone inflation outlook just as the ECB prepares its next move. That backdrop is a key reason markets aren't just pricing a single 25bp hike to 2.50% but are also weighing the odds of continued tightening beyond this meeting.

For EUR/USD, this dynamic has helped underpin the pair's push back above its 200-day moving average toward 1.1640, a two-week high. Persistent energy-driven price pressure strengthens the case for a hawkish ECB stance, which typically supports the single currency against the dollar.

The 1.1604 level remains the near-term pivot: sustained inflation concerns tied to energy costs could keep buyers defending this support, while any easing in energy prices might remove one of the pillars currently propping up the euro's advance.