Published on 28.04.2022 13:27

The Euro is continuing to get hammered against the US dollar in today’s trading session after Russia threatened to cut the gas supply to more countries which threatens to cause an unprecedented enery crises in the Eurozone.

The euro is hovering around $1.0553, after hitting a five-year low of $1.0515 in yesterday’s trading session. The single currency has fallen 4.6% so far in April and is heading for its worst month since early 2015.

The currency is now dangerously close to huge chart support levels stretching from $1.0500 down to a trough from 2017 at $1.0344. A break of this key level would take it to the lows not seen since 2002 and probably push it below parity with the US dollar.

Any further escalation in the energy war with Russia will probably accelerate the declines and that may be known later today when the deadline arrives for other countries such as Germany to settle their gas debts in Rubles which have steadfastly refused to do.

Russia has threatened to retaliate and cut off the gas supplies as it did to Poland and Bulgaria yesterday.

“The increased costs of energy transition and security, the hit to confidence and potential for further downgrading of regional growth towards recession triggered the slump through 2020’s 1.0635-40 lows and raise potential for a sharp test of 2017’s 1.0340 low, with interim levels of note at 1.0450 and 1.0415.” noted analysts from Westpac

“It is difficult to see what data out of eurozone can stem the slide in EUR ahead of the EC’s Eurogroup and FOMC meetings next week.”

“EUR would now need to regain levels above 1.0760 to reduce downside risks.” They added

Some other key drivers of the EUR/USD currency pair today will be the release of Consumer price index figures from Germany followed by the latest GDP figures from the US and both of the figures will be crucial in determining how the European Central Bank and US Federal Reserve act with regards to hiking interest rates.