EUR/USD consolidates around 1.1000 ahead of EU leaders summit and PMIs

• EUR/USD has stuck around 1.1000 as investors await fresh impetus from EU leaders summit.
• EU members are mixed on the embargo of Russian oil, Germany reiterates to stick with Russian oil.
• A preliminary estimate for the US and Euro PMI is 56.3 and 56 respectively.

The EUR/USD pair is juggling around 1.1000 in the absence of any potential trigger that could dictate the further direction for the asset. Investors are waiting for the European Union (EU) leaders summit, which will also be joined by US President Joe Biden on Thursday.

The central attention of the meeting is likely to be attributed to an embargo on Russian oil. Following Russia’s invasion of Ukraine, the EU has concluded that Russia’s arbitrariness should be answered with an aggressive stick approach. Instead of that, the EU leaders are likely to discuss an embargo on Russian oil despite a higher dependency on oil imports from Moscow.

It is worth noting that Europe banks heavily on Russia to address its 30% demand for energy and 25% demand for oil. And, gauging a substitute on very short notice may escalate the threat of supply worries and eventually to slippage in manufacturing activities. However, EU members are mixed on banning Russian oil as Germany has stated that it is notwithstanding the decision of banning the Russian oil imports in the current scenario considering the boiling oil prices and supply chain bottlenecks.

Meanwhile, the US dollar index (DXY) has been struck around 98.60 and is indicating a volatility contraction going forward.

Apart from the EU leaders summit, investors will focus on Manufacturing PMI prints from the US and eurozone. The US Manufacturing PMI is likely to land at 56.3, lower than the previous figure of 57.3 while the eurozone PMI may reveal a figure of 56, lower than the prior print of 58.2.