EUR/USD Price Analysis: Attempts a consolidation break as USD Index loses upside momentum

• EUR/USD has delivered an upside break of the 20-pips range formed above 1.0900.
• The ECB has confirmed that more interest rates are in the pipeline due to persistence in core inflation.
• EUR/USD has shown a mild correction after confidently climbing above the 61.8% Fibonacci retracement at 1.0920.

The EUR/USD pair is coming out of the woods as the US Dollar Index (DXY) has faced stiff barricades around 102.60 in the London session. The major currency pair has delivered a breakout of the consolidation formed in a narrow range of 20 pips.

S&P500 futures have extended losses in the European session amid caution due to an extended weekend in the United States. Meanwhile, investors are looking for a potential trigger that will bring an action in the FX domain.

On the Eurozone front, more interest rate hikes are anticipated from the European Central Bank (ECB) despite a threat to economic prospects. ECB President Christine Lagarde has confirmed that more interest rates are in the pipeline due to persistence in core inflation.

EUR/USD has shown a mild correction after confidently climbing above the 61.8% Fibonacci retracement (plotted from April 26 high at 1.1095 to May 31 low at 1.0635) at 1.0920. The 20-period Exponential Moving Average (EMA) at 1.0910 is providing a cushion to the Euro bulls.

The Relative Strength Index (RSI) (14) is oscillating in the bullish range of 60.00-80.00, which indicates that the bullish momentum is already active.

More gains will be added by the major currency pair on a break above May 02 low at 1.0942, which will drive the asset toward the psychological resistance at 1.1000 and May 08 high at 1.1054.

In an alternate scenario, a breakdown below 50% Fibo retracement at 1.0865 will drag the shared currency pair toward 38.2% Fibo at 1.0813 followed by June 14 low at 1.0775.

EUR/USD four-hour chart