EUR/USD attempts to extend recovery above 1.0440 ahead of eurozone PMI and Fed minutes

• EUR/USD is aiming to violate 1.0440 as investors see eurozone PMI stable.
• The DXY is displaying a subdued performance as the focus has shifted to the Fed minutes.
• The ECB may announce its first interest rate hike after a span of 11 years.

The EUR/USD pair is juggling in a narrow range of 1.0423-1.0438 in the Asian session after rebounding from the critical support of 1.0420. On a broader note, the shared currency bulls have defended the significant support of 1.0380 and have recovered firmly as investors are betting over a rate hike by the European Central Bank (ECB).

The FX domain is waiting for the rate hike announcement from the ECB as it will be the first rate hike by the central bank in the past 11 years. Taking into consideration the plain-vanilla Harmonized Index of Consumer Prices (HICP), which has climbed to 8.6%, a rate hike looks invincible. The households in Europe are facing real income shocks as soaring oil and food prices have reduced their paychecks. However, the continuation of an accommodative monetary policy may elevate the price rise further.

In today’s session, investors will keep an eye on the eurozone PMI data. The S&P Global Composite and Services PMI are expected to remain stable at 51.9 and 52.8 respectively.

Meanwhile, the US dollar index (DXY) is facing barricades around 105.20 as the asset is expected to remain volatile ahead of the release of the Federal Open Market Committee (FOMC) minutes, which are due on Wednesday. The release of the Fed minutes will unfold the ideology behind announcing the 75 basis points (bps) interest rate hike by the Federal Reserve (Fed) in its June monetary policy.