EUR/USD aims establishment above 1.0000 for a sheer upside, German Inflation eyed
- EUR/USD is aiming to sustain above the magical figure of 1.0000 for a fresh rally.
- The German HICP is expected to advance further to 8.7% amid the energy crisis.
- A decline in ISM Manufacturing PMI may weigh pressure on the DXY.
The EUR/USD pair has displayed a minor rebound after hitting the immediate support near 0.9980 in the Asian session. On a broader note, the asset is oscillating in a range of 0.9981-1.0029 and is likely to remain rangebound as the market participants are awaiting the release of the Germany Inflation figures.
As per the preliminary estimates, the German Harmonized Index of Consumer Prices (HICP) is expected to land at 8.7%, higher than the prior release of 8.5%. The investing community is aware of the fact that the energy crisis is driving the inflationary pressure in Germany. Also, Germany is a core member of the European Union (EU), therefore a meaningful impact on German economic activities will have repercussions on the shared currency.
As price pressures are expected to further rise in Germany, the European Central Bank (ECB) would require an adaptation of a hawkish stance on the interest rates. ECB President Christine Lagarde may tighten the policy rates in order to bring price stability. Meanwhile, supply cuts from Nord Stream 1 pipeline to Germany have started due to unscheduled maintenance. This may further escalate the energy shortage.
On the dollar front, the US dollar index (DXY) is displaying a lackluster performance in the Asian session. The DXY is hovering around 108.80 as investors are awaiting the release of the ISM Manufacturing PMI data, which will release on Thursday. The economic data is expected to land at 52, lower than the prior release of 52.8. As the Federal Reserve (Fed) is entirely focused on achieving price stability, economic activities are expected to go through severe pain.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
