EUR/USD remains sideways around a potential cushion at 0.9950, US Durable Goods Orders buzz
|- EUR/USD is juggling around 0.9950 as investors await US Durable Goods Orders data.
- The potential German energy crisis has put the shared currency bulls on the tenterhooks.
- The US Durable Goods Orders are expected to trim to 0.6% vs. 2% recorded earlier.
The EUR/USD pair is displaying back and forth moves in a narrow range of 0.9944-0.9956 in the Asian session. The asset has turned sideways after a decent correction from above the magical figure of 1.0000. Considering a broader context, the downside for the EUR/USD pair remains favored. Earlier, the asset rebounded firmly after printing a fresh two-decade low near 0.9900 as German Purchasing Managers Index (PMI) displayed a mixed performance in spite of vulnerable consensus.
The US dollar index (DXY) is displaying a lackluster performance after a firmer rebound from Tuesday’s low at 108.36. The asset has regained strength despite a serious contraction in the private sector. US PMI contracted dramatically led by mounting interest rates by the Federal Reserve (Fed). However, the DXY has still regained strength as the Fed will continue its path of hiking interest rates with similar velocity despite the headwinds of contraction in economic activities.
Going forward, the entire focus of the market participants will remain on the US Durable Goods Orders data. The economic data is expected to contract to 0.6% from the prior release of 2%. This also indicates a decline in the overall demand in the US economy and may result in more pressure on the US dollar index (DXY).
However, the shared currency bulls are worried over the potential energy crisis in Germany. A three-day unscheduled cut-off of energy supplies for maintenance of Nord Stream 1 pipeline could accelerate the already imbalance in the demand-supply mechanism. Germany is a core member of the European Union (EU) and a situation of energy crisis in the aforementioned zone will have a significant impact on the Eurozone.
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