The protracted energy crisis in Europe is putting more pressure on the Euro currency as attention turns to reports of the closure of Russia's Nord Stream 1 pipeline to Europe last week.
As Europe feared, Russia continued the blockade of energy supplies and urged Europe to withdraw the sanctions that Europe had implemented on Russia before.
Thus, concerns about rising energy price pressure in Europe will worsen the performance of the Euro this week.
However, the Euro was spared from falling lower against the US dollar despite the decline earlier in the week hitting a fresh 22-year low following the uncertain direction of the US dollar.
Investors are likely to be cautious ahead of the release of the ISM survey data for the service sector in the United States (US) in the New York session tonight.
If you look at the price movement on the EUR/USD currency pair chart, the price started trading at the beginning of the week with a decline reaching the latest 22-year low to the expected level of 0.98800 which is the latest support for the price.
However, the price was seen to bounce back to close the New York session close around 0.99300.
The decline of the US dollar continued at the opening of the Asian session this Tuesday morning with the increase in price having crossed the Moving Average 50 (MA50) barrier level on the 1-hour time frame to signal a change in the bullish trend.
However, price increases are likely to be limited by the pressure on the Euro currency following the development of the energy crisis in Europe.
If the successful price increase also continues, the parity level of 1.0000 will be tested to be broken before the price continues to rise higher towards the target resistance level of 1.0100.
On the other hand if the price returns to show a decline again, the latest support level at 0.9880 will be tested again.
Continuing the decline lower beyond that level, the price will record another new low with the next target to reach 0.98000.
