EUR/USD bounces above 1.0840 ahead of Euro’s Consumer Confidence and Core CPI

• EUR/USD has attracted some bids near 1.0830 as the DXY has found uncertainty ahead of Fed’s Powell.
• A lower reading of the Euro’s Consumer Confidence may dent the shared currency.
• The fears of stagflation are expected to keep the euro on the back foot.

The EUR/USD pair is witnessing a double-distribution trend day in today’s session amid a cautious market mood over the release of the Consumer Confidence and core Consumer Price Index (CPI) in the Eurozone. The asset displayed a narrow-range movement at the initial hour in early Tokyo, broke downside to 1.0824, and is likely to balance further.

The Eurozone is facing the headwinds of higher energy prices after Russia invaded Ukraine. Europe, which addresses 25% of its energy demand and more than 30% of its oil demand from Russia, is one of the major victims of war. The economy is likely to witness the situation of stagflation due to higher inflation and stagnant growth rate. Meanwhile, investors are bracing further drop in the Euro’s Consumer Confidence. The confidence catalyst is expected to release at -20 against the prior figure of -18.7. This may trigger some downside pressures on the shared currency. While the yearly core CPI is seen at 3% similar to the previous print of 3%.

On the dollar front, the US dollar index (DXY) has slipped after printing an intraday high at 100.59. The DXY is likely to reveal some wild moves in the European session as investors are waiting for the speech of Federal Reserve (Fed) Jerome Powell, which is due in the New York session. The insights from the speech will be more impactful as it is likely to be the last speech by Fed Powell before the rate hike announcement in May.