EUR/USD Plunges Amid Energy Shock and Hawkish Fed

The EUR/USD has taken a sharp drop due to rising energy prices and a rebounding US dollar ahead of the FOMC rate decision. The Federal Reserve is widely expected to raise interest rates, which will further strengthen the dollar.

Oil prices have resumed their rally after Saudi Arabia shut down its East-West pipeline following drone attacks from Iraq. This has added pressure on energy importers and reduced risk appetite in financial markets.

The euro has some support due to the ECB's hawkish tone, but it remains uncertain whether the central bank will deliver further rate increases. The EUR/USD forecast is tilted moderately lower until the US dollar debasement narrative regains focus.