• EURUSD is oscillating around 1.0440, upside remains favored on weaker DXY.
• The ECB is set to elevate its interest rates for the first time in 11 years.
• Price pressures have impacted Consumer Confidence in Eurozone and the US.

EURUSD price is displaying back and forth moves in a minute range of 1.0139-1.0146 in the early Tokyo session. The asset has displayed a corrective phase after a sheer upside move. The pair turned into correction mode after failing to overstep the crucial resistance of 1.0200 on Monday. The major has renewed its weekly high at 1.0201 and is likely to extend gains as the corrective move will turn into a bullish impulsive wave ahead.

The US dollar index (DXY) has attempted a rebound after witnessing a vertical downside move. The asset has rebounded after picking bids from near 107.00. The pullback move by the DXY after a sharp correction is expected to over soon as the asset has reached near the potential resistance of 107.50 and may initiate its south-side move again. The market participants will capitalize on the bargain sell and will initiate shorts on the counter.

Also Read: EUR/USD Forecast: EUR corrects higher ahead of critical ECB decision

ECB to step up interest rates for the first time in 11 years

Price pressures trim Consumer Confidence in Eurozone and the US

Soaring price pressures in the Eurozone and the US have trimmed the Consumer Confidence in their respective economies. Higher inflation rates and lower earnings have resulted in a very real income shock for individuals. Their paychecks are unable to address their recurring savings and consumption pattern. The eurozone will report its Consumer Confidence data on Wednesday, which is seen at -24.5 vs. -23.6. The University of Michigan has already reported the Consumer Sentiment Index (CSI) data. The sentiment data improved minutely but remained near the two-year low.

EURUSD to extend rally on hawkish ECB bets

EURUSD price is likely to recapture Monday’s high near 1.0200 as the odds of a rate hike by the European Central Bank (ECB) are advancing vigorously. Price pressures are impacting the paychecks of the households and ECB policymakers are left with no other choice than to tap for interest rate elevation. The ECB has already concluded its Asset Purchase Program (APP) to squeeze liquidity from the market. It is worth noting that the ECB is going to elevate its interest rates for the first time in the past 11 years.

Gas-related concerns escalate in Eurozone

The major catalyst that could turn the firm rally of the EURUSD price into turmoil is the escalating gas-related concerns in eurozone. The eurozone is already facing the heat of an energy crisis after its promise to lower its dependency on oil and energy imports from Russia after its invasion of Ukraine. The Russian Gazprom company has declared force majeure on supplies and said it could not guarantee gas supplies to Europe because of "extraordinary" circumstances.

Stable Eurozone HICP numbers are expected

EURUSD is expected to display wild moves as Eurostat will report the Harmonized Index of Consumer Prices (HICP) on Tuesday, which is seen stable at 8.6% on an annual basis. Steady HICP figures in the eurozone are expected to delight the European Central Bank (ECB) as they won’t require moving furiously toward raising interest rates. Other Western nations are reporting a steep rise in their inflation rates. Also, the expectations are also stalling higher.

EURUSD technical analysis

EURUSD has attempted to kiss the 38.2% Fibonacci retracement (which is placed from June 28 high at 1.0615 to July 14 low at 0.9952) at 1.0207. The trendline placed from July 14 low at 1.0207 adjoining July 15 low at 1.0008 will act as major support for the counter.

The pair has crossed the 50- and 200-period Exponential Moving Averages (EMAs) at 1.0106 and 1.0130 respectively, which adds to the upside filters. It is worth noting that the 200-period EMA is still higher than the 50-EMA while the asset has crossed both firmly. This indicates a strong responsive buying action after a steep downside.

Meanwhile, the Relative Strength Index (RSI) (14) has slipped below the bullish range of 60.00-80.00 amid a correction.

EURUSD hourly chart

Elliott Wave trading strategies: DAX 40, FTSE 100, STOXX 50, Dollar Index, EUR/USD