EUR/USD Trades in a 1.0780-1.0800 Range as Attention Turns to Fed Chairman Powell and ECB President Lagarde's Speeches

The EUR/USD pair is trading sideways within a narrow range of 1.0780-1.0798 as the US dollar index (DXY) maintains its stability following an attack on the round level resistance of 101.00 during the Asian session. Market players are anticipating Thursday's dictations from Federal Reserve (Fed) Chairman Jerome Powell and European Central Bank (ECB) President Christine Lagarde.

The asset has been drifting lower this month, owing to the Fed's and ECB's divergent approaches to their different interest rate policies. On the one hand, the Fed appears to be torn between a 50-basis-point (bps) or 75-basis-point (bps) rate hike and a 75-basis-point boost, despite the fact that a rate hike is impending to limit the inflation issue.

Meanwhile, supply chain constraints and rising energy prices have left the ECB with no choice but to maintain a neutral position. Following Russia's invasion of Ukraine, the eurozone has seen sluggish growth, which is projected to persist for an extended period. Increased energy expenditures reduce households' real incomes and, as a result, their trust in the European economy. This has also fueled fears of stagflation in Europe, complicating the ECB's decision-making.

Investors will be watching the publication of the Eurozone's Industrial Production during the Europe session. Monthly Industrial Production is predicted to come in at 0.7 percent, while the catalyst may come in at 1.5 percent on a yearly basis.

EUR/USD