EUR/USD recovers to near 1.0970 but is inside the woods ahead amid hawkish Fed bets

• EUR/USD is oscillating in a bounded territory amid an absence of a critical trigger.
• Accelerating US weekly jobless claims cemented fears of easing labor market conditions.
• Fed policymakers are still confident of more rate hikes despite easing labor market conditions.

The EUR/USD pair has rebounded from 1.0960 after a corrective move but is inside the woods as investors are awaiting the release of the preliminary Eurozone/United States S&P PMI data (April). The major currency pair has remained in a range of 1.0911-1.1000 from the past two trading sessions as the FX domain is preparing for the pre-anxiety move ahead of a monetary policy decision from the Federal Reserve (Fed).

S&P500 settled on a negative note consecutively for the third day amid sheer volatility inspired by quarterly result season. Weak earnings from Tesla weighed heavily on market sentiment on Thursday. Also, poor revenue guidance due to the consideration of lowering prices cautioned market participants. The impact of higher interest rates by the Fed is clearly visible in the quarterly earnings show. As per Refinitiv data, analysts have largely retained last week's expectations of a near 5% YoY fall in quarterly profits of companies in the 500-US stocks basket.

The US Dollar Index (DXY) is defending the critical support of 101.60 for the past few trading sessions. The USD Index also defended the aforementioned support on Thursday despite the release of downbeat Jobless claims data. The US Department of Labor reported a jump in the number of Initial Jobless Claims for the week ending April 04 at 245K, higher than the estimates and the former release of 240K. Accelerating jobless claims cemented fears of easing labor market conditions.

However, Fed policymakers are still confident of more rate hikes from the central bank. Cleveland Federal Reserve President Loretta Mester reiterated on Thursday that the Fed has more work to do with inflation in the US staying too high, per Reuters. He further added, "Fed will need to hike policy rate to over 5% and hold there for a while."

On the Eurozone front, preliminary Consumer Confidence (April) improved to -17.5 from the expectations of -18.5 and the former release of -19.2. This could be the outcome of a consistent decline in inflationary pressures after enormous efforts from the European Central Bank (ECB).