EUR/USD climbs above 1.0520 as DXY weakens, focus shifts to PMI

The EUR/USD pair is advancing swiftly higher in the Asian session and has surpassed 1.0520 as the US dollar index (DXY) has lost its grip. The pair has displayed a bullish open drive session as the asset is scaling higher right from the first auction order. On a broader note, the major witnessed a corrective move after failing to cross the psychological resistance of 1.0600. Now, a rebound has been witnessed in the counter, which looks firmer and is expected to add significant gains.

In today’s session, the DXY has witnessed a steep fall right from the open and a downside move has been recorded after oscillation in a 104.62-104.72 range. The DXY is underperforming despite the hawkish comments from Federal Reserve (Fed) policymakers.

Cleveland Fed Bank President Loretta Mester in her interview with CBS News on Sunday dictated that the price pressures won’t get trimmed overnight. It will take a period of two years but will get back to its neutral state. The Unemployment Rate may increase to 4.00-4.2% and the Fed could dictate one more 75 basis points (bps) rate hike in July.

This week, the focus will remain on the Purchase Managers Index (PMI numbers from the US and eurozone. The US Services PMI is seen extremely lower at 49.1 against the prior print of 53.2. While the eurozone Services PMI will shift lower to 55.5 vs. 56.1 reported earlier. The US Manufacturing PMI is expected to slip to 54.7 from the former figure of 55.7. While the eurozone Manufacturing PMI may land at 53.9, lower than the prior figure of 54.6.