• EUR/USD is making efforts for defending its 1.0950 support as USD Index has shown recovery.
• Loans and advances to US businesses and consumers have dropped due to tight credit conditions by US banks.
• Citi Group is expecting a recession in the US economy in the fourth quarter.

The EUR/USD pair is expected to deliver a sheer downside below the immediate support of 1.0950 in the Asian session. The major currency pair is attracting offers as the US Dollar Index (DXY) has shown a recovery move and has scaled above the 102.00 resistance.

S&P500 futures have extended their downside in the Asian session in hopes that more rates from the Federal Reserve (Fed) could spoil revenue guidance.

The minutes from Federal Reserve’s (Fed) Beige Book indicate a steady performance in economic activities in the majority of districts. However, loans and advances to businesses and consumers have dropped due to tight credit conditions nominated by United States commercial banks to dodge uncertainty in a turbulent environment.

Meanwhile, Fed policymakers are still confident about economic prospects due to the tight labor market. St. Louis Fed President James Bullard advocated for the continuation of the policy-tightening spell by the central bank considering the fact that labor market data is still solid, as reported by Reuters. Fed policymaker further added that demand for labor has not softened yet and a strong labor market leads to strong consumption.

Considering the tight US labor market, Citi Group is expecting a recession in the US economy in the fourth quarter. Earlier, it anticipated that the US will declare recession in the third quarter of 2023.

On the Eurozone front, investors are awaiting the release of the Consumer Confidence data. Preliminary Consumer Confidence (April) data is expected to improve to -18.5 from the former release of -19.2. The reason could be consistently declining Eurozone inflation, which is receding the burden from households.