EUR/USD faces 1.0820 support as oil surge weighs on European outlook

EUR/USD declined 0.3% to 1.0835 as surging oil prices threaten European economic recovery while strengthening the dollar. WTI crude jumped 2.8% to $78.50/barrel on Middle East supply concerns and OPEC+ production discipline. Higher energy costs pose significant headwinds for the energy-importing Eurozone, potentially forcing the ECB to maintain restrictive policy longer. Technical analysis shows EUR/USD testing critical support at 1.0820, where the 200-day moving average converges with horizontal support. A break below could accelerate declines toward 1.0780. Meanwhile, the Dollar Index gained 0.4% to 104.20, benefiting from safe-haven flows and energy sector strength. Traders await Thursday's ECB meeting minutes for clues on policymakers' assessment of inflation risks from elevated commodity prices. The oil-euro negative correlation remains a key driver for near-term direction.