EUR/USD consolidates below 1.0550 ahead of EU HICP, risk-on mood underpins euro

• EUR/USD is expecting an intensive buying action around 1.0550 amid the soaring market mood.
• The annual Euro HICP is seen stable at 7.5%.
• Fed’s Powell has emphasized bringing price stability sooner.

The EUR/USD pair is struggling to overstep the crucial resistance of 1.0550 in the Asian session. The asset is experiencing a volatility contraction after a juggernaut upside move from a low of 1.0354 recorded last week. A rebound in the positive market sentiment has improved the demand for the risk-perceived currencies upon which the shared currency bulls are enjoying the liquidity.

The asset is oscillating in a minor range of 1.0557-1.0533 as investors are awaiting the release of the Eurozone Harmonised Index of Consumer Prices (HICP) numbers, which are due in the European session. The annual figure is seen stable at 7.5% while the monthly figure could tumble to 0.6% against the prior print of 2.4%. The asset remained firmer on Tuesday after the Eurostat reported a tad better performance on the Gross Domestic Product (GDP) numbers front than the expectations.  The yearly GDP landed at 5.1% vs. 5% while the quarterly figure printed at 0.3% vs. 0.2% as expected.

Meanwhile, the US dollar index (DXY) is holding itself above the round-level support of 103.00. The diminishing interest of investors in the safe-haven assets has brought an intense sell-off in the DXY. A fall of more than 1.5% has been recorded from its 19-year high of 105.00. The odds of more than two 50 basis points (bps) interest rate hikes in 2022 are advancing sharply. Federal Reserve (Fed) Jerome Powell has emphasized bringing the price stability sooner rather than later.