EUR/USD sees cushion around 1.0580 on subdued DXY, Fed Powell in focus
|- EUR/USD is holding above 1.0570 ahead of ECB Lagarde’s speech.
- A significant rate hike by the ECB looks likely as the inflation rate has climbed above 8%.
- The speech from Fed Powell will fade some clouds of uncertainty over the extent of July’s rate hike.
The EUR/USD pair is seeking some bids around 1.0580 and is expected to advance towards the round-level resistance of 1.0600. The asset is juggling in a narrow range of 1.0570-1.0586 from the early Tokyo session as investors are shifting their focus on speeches from European Central Bank (ECB) President Christine Lagarde and Federal Reserve (Fed) chair Jerome Powell on Tuesday and Wednesday respectively.
At the ECB Forum in Sintra, Portugal, ECB Lagarde is expected to provide insights on how aggressive the ECB can go to fix the eurozone inflation mess. It won’t be wrong to dictate that the ECB has taken the inflation monster lightly by not elevating its interest rates yet. This is the reason that the inflation rate in the eurozone has climbed above 8%. And, this Friday an escalation is expected from the prior release. Also, the market participants will focus on the roadmap to be dictated by ECB Lagarde for further monetary policy meetings.
Meanwhile, the US dollar index (DXY) has defined its range for auctioning till the availability of an effective trigger. The asset is oscillating in a range of 103.89-104.02 in the early European session. Going forward, the speech from Fed Powell will be of key importance as it will fade some clouds of uncertainty from the extent of the interest rate hike to be announced in July. It is worth noting that the upbeat US Durable Goods Orders will strengthen the Fed to feature policy tightening decisions fearlessly.
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