EUR/USD attracts some sellers around 1.0550 ahead of the German GDP, CPI data

• EUR/USD loses traction around the mid-1.0500 in early Monday.
• The market expects the economic condition in Europe to further deteriorate.
• Federal Reserve (Fed) is anticipated to hold rate steady at its meeting on Wednesday.
• Traders will monitor the German growth numbers for Q3, the preliminary Spanish CPI, and the German CPI.

The EUR/USD pair posts losses during the early Asian trading hours on Monday. In the busy week in terms of economic data release, traders will take cues from the German growth number and Eurozone GDP and inflation data ahead of the highly-anticipated Federal Reserve (Fed) meeting on Wednesday. The major pair currently trades near 1.0557, losing 0.07% for the day.

The market anticipates that European economic conditions to continue deteriorating. The German Gross Domestic Product (GDP) is expected to contract by 0.3% QoQ from 0.2% expansion in the previous reading. The Eurozone GDP is forecast to decline to 0.2% from 0.5% in the previous reading. Finally, Eurozone HICP is expected to drop from 4.3% to 3.4% in October.

On the US Dollar front, the Federal Reserve (Fed) is expected to hold interest rate unchanged at the end of its two-day meeting on Wednesday. Late last month, Fed Chair Jerome Powell stated that inflation is still too high and this raised the expectation that additional rate hikes by the end of the year cannot be ruled out. That being said, the higher for longer rate narratives in the US could lift the USD and act as a headwind for the EUR/USD pair.

About the data, the Core US Personal Consumption Expenditure Index (PCE) arrived at 3.7% YoY in September versus 3.8% prior. The monthly figure climbed to 0.3% from 0.1% in the previous reading. Additionally, September's headline PCE Price Index came in at 3.4% YoY versus the expected 3.4%.

Market participants will keep an eye on the German Gross Domestic Product (GDP) for the third quarter (Q3). Also, the preliminary Spanish Consumer Price Index (CPI) for October and the German CPI will be released later on Monday. Later this week, German Retail Sales, Eurozone GDP, and Eurozone inflation data will be due on Tuesday. The spotlight this week will be the Fed monetary policy meeting on Wednesday. This event might trigger the volatility in the financial markets and give a clear direction to the EUR/USD pair.