EUR/USD tumbles to near 1.0680 as investors await US inflation and ECB

• EUR/USD has slipped to 1.0680 after failing to sustain above the psychological resistance of 1.0700.
• The DXY is scaling north on advancing odds of a higher US inflation figure.
• Any delay in a rate hike by the ECB would worsen the inflation situation.

The EUR/USD pair is scaling lower gradually after failing to sustain above the psychological resistance of 1.0700. A bearish open test-drive move has been recorded in the asset as the shared currency bulls faced selling pressure around 1.0708 after a nominal upside at open. The major slipped further to near 1.0681 and is indicating more downside amid uncertainty over the interest rate decision by the European Central Bank (ECB) and the release of the US inflation.

The market participants have forecasted the maintenance of the status quo by the ECB. The central bank will keep the interest rates unchanged at 0% despite mounting price pressures. It is worth noting that the eurozone Harmonized Index of Consumer Prices (HICP) landed above 8% last week. Other Western leaders have also displayed higher inflation, however, their respective central banks have already elevated their interest rates to contain the galloping prices.  

The ECB has not raised its interest rates yet and any further delay in the rate hikes will infuse an adrenaline rush into the inflation monster.  

Apart from the ECB monetary policy, investors are awaiting the eurozone's Gross Domestic Product (GDP) numbers. The quarterly and annual GDP are seen unchanged at 0.3% and 5.1% respectively.

Meanwhile, the US dollar index (DXY) is marching towards Tuesday’s high at 102.84 on higher US Treasury yields. The 10-year US Treasury yield is hovering around 3% as the US inflation is seen above 8%. The US Consumer Price Index (CPI) is expected to land at 8.3% while the core CPI may print at 5.9%.