March 6 (Reuters) - With the euro zone importing oil while the United States exports, the plunge in oil prices, and a possible hike in production that may drive them even lower, could support a bigger EUR/USD rally.

On Wednesday Brent Crude tumbled to a 3-year low. Should producers open the taps as they plan to in April, crude could drop substantially below the base of the $70-100/bbl range traded in the wake of the COVID-19 pandemic.

Targets for a bigger correction of the surge in prices following the pandemic are $63.02 and $42.33. There is potential for a substantial drop in the range.

The drop this year of $12-13/bbl already means there is less inflation in the pipeline and therefore more potential for all central banks to ease.

Given current expectations, the drop in the price of oil is much more significant for the Federal Reserve, which has been more reluctant to lower the U.S. interest rate, than for the European Central Bank, which is speeding ahead.

A substantial slide in oil could push U.S. inflation to or below target, spurring a deeper and faster cycle of rate cuts that undermine the dollar.

EUR/USD, which plunged 1.2349-0.9528 during the U.S. tightening cycle, could rise toward the 1.1271 and 1.1745 targets for a correction of that decline.
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(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)