EURUSD attempts a recovery near 1.0300 as hawkish ECB bets spike

After falling to around the key support level of 1.0310 in the early Asian session, the EURUSD pair has seen some buying interest. After testing Friday's low, the asset has detected buying interest and may look to risk sentiment for more direction. There is currently no pressure on the risk profile, which will likely support risk-perceived currencies in the future.

On Friday, S&P500 saw excellent gains as odds are not sufficient for a consecutive 75 basis point (bps) rate hike by the Federal Reserve (Fed) (Fed). While the headline inflation rate of 7.7% continues to be a big concern for market players, the underlying inflation rate has slowed. Fed Bank of Boston President Susan Collins cited this week that the US central bank has more work to do to bring inflation down, as reported by Reuters. "Additional rises in the federal funds rate will be necessary, followed by a period of maintaining rates at a sufficiently restrictive level for some time," he continued.

In the meantime, the US dollar index (DXY) has encountered obstacles near the round-level resistance of 107.00 and is anticipated to remain on edge ahead of US Durable Goods Orders data. According to forecasts, the economic statistics is expected to remain unchanged at 0.4%.

Durability in the Durable Goods Orders statistics during a period of rising interest rates could cause additional problems for Federal Reserve Chair Jerome Powell. To combat inflation, the Fed has been aiming to keep the total demand at a modest profile. This also suggests that households are turning to loans with higher interest rates to satisfy their demand for durable items.

Christine Lagarde, president of the European Central Bank (ECB), stated at the European Banking Congress that the ECB is dedicated to reducing medium-term inflation to 2% in a timely manner by increasing interest rates. She emphasized that a recession is unlikely to considerably reduce inflation.