EURUSD continues to struggle around 1.0350 amid quiet market mood, Eurozone GDP eyed

• EURUSD is facing barricades around 1.0350 amid the unavailability of any potential trigger.
• Fed Brainard supported the view of trimming the rate hike pace due to a steep fall in October inflation report.
• Going forward, Eurozone GDP will be of utmost importance.

The EURUSD pair is sensing a capped upside around 1.0350 in the Tokyo session. Quite market mood due to the absence of a potential trigger has shifted the currencies into the rangebound structure. On a broader note, the asset is displaying topsy-turvy moves in a 1.0271-1.0350 range from Monday’s trading session.

The upside in the US dollar index (DXY) is restricted due to rising odds for a slowdown in the pace of rate hikes by the Federal Reserve (Fed). While anxiety ahead of the US midterm elections is providing some cushion to the mighty DXY at the downside.

Chances of shifting hands of stewardship for the US House of Representatives to Republicans weighed pressure on S&P500. A majority win of Republicans will not be in favor of expansionary policies to be announced later as those policies will have to go through Republicans’ confirmation before execution.

A rebound move in the 10-year US Treasury yields remained marginal to near 3.87% as the CME FedWatch tool claims that the chances of a fifth consecutive rate hike by 75 basis points (bps) in December monetary policy are extremely low.

Also, Fed Vice Chair Lael Brainard supported the view of reducing the pace of policy tightening. He cited that “It will soon be appropriate for the Federal Reserve to reduce the pace of its interest rates hikes”, in an interview with Bloomberg.

On the Eurozone front, the Gross Domestic Product (GDP) data will be of utmost importance. As per the consensus, the annual Gross Domestic Data (GDP) is expected to remain stable at 2.1%. The economy is facing the turbulence of soaring inflation, energy crisis, and supply chain bottlenecks due to Russia-Ukraine tensions. Therefore, a stable GDP data might be supportive for the shared currency.