EUR/USD oscillates around 1.0550 as investors await US ISM PMI for fresh impetus

• EUR/USD is displaying a sideways profile around 1.0550 ahead of FOMC minutes and US ISM PMI data.
• Lower dependence on debt by corporate might impact the US Manufacturing PMI.
• A decline in energy prices and the government's one-off payment of household energy bills have trimmed German HICP.

The EUR/USD pair has sensed a tepid demand around the cushion of 1.0540 in the Asian session. The major currency pair is broadly displaying back-and-forth moves around 1.0550 as investors are awaiting the release of the United States ISM Manufacturing PMI data for fresh cues.

The major remained in a negative trajectory on Tuesday as investors underpinned the risk-aversion theme. S&P500 witnessed a sell-off from the market participants ahead of the Federal Open Market Committee (FOMC) minutes, which are scheduled for Thursday. The US Dollar Index (DXY) is displaying an inventory adjustment of around 104.40 and is aiming to extend its recovery ahead.

On Wednesday, investors will keep an eye on the release of the S ISM Manufacturing PMI, which is likely to decline to 48.5 vs. the former release of 49.0. Higher interest rates by the Federal Reserve (Fed) are resulting in lower dependence on debt by corporate as it will lead to higher interest obligations. Therefore, a drop in investment decisions and expansion in current capacity is impacting the volume of manufacturing activities. Also, a decline in retail demand has trimmed supply from factory gates.

Apart from the Manufacturing PMI, the catalyst that will impact the US Dollar is the New Orders Index, which is expected to improve to 48.1 vs. the former release of 47.2. The catalyst indicates the extent of forward demand, which might support a bullish extension in the current range of the USD Index.

On the Eurozone front, the German Harmonized Index of Consumer Prices (HICP) has dropped to 9.6% while the street was expecting a drop to 10.7% from the former release of 11.3%. According to Reuters, a significant drop in the price index is backed by falling energy prices and the government's one-off payment of household energy bills. This is going to delight the European Central Bank (ECB), which is worried about rising inflation.