EUR/USD advances towards 1.0500 on soaring market mood, Eurogroup meeting in focus

• EUR/USD is marching towards 1.0500 amid a positive market mood.
• A mega rate hike announcement by the Fed has strengthened the risk-sensitive currencies.
• The key agendas for the Eurogroup meeting will be sky-rocketing inflation and new oil suppliers.

The EUR/USD pair is oscillating in a narrow range of 1.0437-1.0453 in the early Tokyo session after a firmer upside move. A mega rate hike announcement by the Federal Reserve (Fed) has underpinned the risk-sensitive currencies and has diminished the safe-haven's appeal. A minor rangebound move is expected to be followed by an upside move, which will drive the asset towards the psychological resistance of 1.0500.

A two-day monetary policy meeting of the Fed policymakers turned out as a nightmare for the greenback. Taking into account the price pressures and tight labor market, the Fed has featured a 75 basis point (bps) interest rate hike. Higher-than-expected interest rate hike brought a sell-off in the yields and the US dollar index (DXY). Fed chair Jerome Powell in his press conference dictated that the US economy is very strong and well-positioned to handle a tighter policy.

The Fed believes that higher rate hikes would result in lower employment opportunities and an increase in the jobless rate. Price pressures are soaring sharply and in order to tame them, the Fed is ready to sacrifice the tight labor market. As per the dictations in the conference, Fed chair Jerome Powell is fine with the rising jobless rate to 4.1%, with a stipulation that the inflation should get cornered.

On the eurozone front, investors are focusing on the minutes from the Eurogroup meeting. The major agendas are expected to be gauging new oil suppliers after banning Russian oil imports. Also, mounting price pressures are a major worry for the responsible authorities. Therefore, some measures could be taken on the same.