• EUR/USD is expected to resume its upside journey after violating 1.0430.
• The DXY has sensed barricades around 105.20 ahead of FOMC minutes.
• The ECB is highly required to surrender its ongoing accommodative policy.

The EUR/USD pair is hoping for a bullish ride after violating the minor hurdle of 1.0430 as investors are expecting a rate hike announcement by the European Central Bank (ECB) in its July monetary policy. On Monday, the asset displayed a corrective action after hitting a high of 1.0463.

The odds of a rate hike by the ECB are soaring as escalating price pressures are compelling to halt the accommodative stance and turn to policy tightening measures aggressively. Last week, the eurozone Harmonized Index of Consumer Prices (HICP) landed at 8.6%, higher than estimates of 8.4% and the prior print of 8.1%.

Higher price pressures have resulted in a very large real income shock for the households in Europe. Therefore, the roaring inflation is highly needed to be tamed by featuring rate hikes. It is worth noting that the ECB has not elevated its interest rates in the past 11 years. Now, the Russia-Ukraine crisis and supply chain bottlenecks have accelerated the oil and food prices and the ECB is left with no other option than to raise interest rates.

Meanwhile, the US dollar index (DXY) has given a downside break of the consolidation range, which is placed in a 5-pips range in the Tokyo session. The market participants are awaiting the release of the Federal Open Market Committee (FOMC) minutes, which are due on Wednesday. This will unlock the ideology of the Federal Reserve (Fed) policymakers behind announcing the 75 basis points (bps) rate hike in June. Also, it will provide the absolute situation of the macro-indictors in the US economy.