EUR/USD aims to recapture 1.0000 magical figure as focus shifts to ECB policy

The EUR/USD pair displays a minor correction after printing an intraday high of 0.9970 in the Asian session. The corrective move does not resemble signs of bearish reversal but a healthy decline, which the market participants for adding longs will capitalize on. On Monday, the asset displayed a firmer rebound after halting the crucial support of 0.9900. As investors considered the pair a value bet, the shared currency bulls strengthened and recovered sharply.

 The eurozone bulls are picking bids as odds are advancing for a hawkish stance by the European Central Bank (ECB) on interest rates. As price pressures are soaring in the trading bloc, ECB President Christine Lagarde may announce a rate hike by 50 basis points (bps). Eurozone Harmonized Index of Consumer Prices (HICP), ECB’s most preferred inflation indicator landed at 9.1%, which is highly needed to contain sooner.

Meanwhile, the energy crisis deepens in the eurozone as Russia has halted energy supplies through Nord Stream 1 pipeline due to western sanctions. Western leaders levied a price cap on Russian oil and in response, Kremlin has cut off gas supply ahead of the winter season, known for higher energy demand.

On the dollar front, the US dollar index (DXY) has attempted a recovery after remaining volatile in the opening session. The DXY has picked bids around 109.40, however, the downside remains favored amid weaker estimates for The US ISM Services PMI data. The economic data is seen at 55.5, lower than the prior release of 56.7.