• EURUSD is advancing towards 1.0400 amid US Inflation-fuelled optimism in the market.
• The US bond market may see roller-coaster moves after an extended weekend.
• Investors will keep an eye on Eurozone GDP data for further cues.

The EURUSD pair is marching towards the round-level resistance of 1.0400 as the current upside momentum doesn’t seem getting exhausted sooner. After a decline in the US Consumer Price Index (CPI) data, the asset has recorded two back-to-back long full-bodied bullish candles, which indicates the strength of the Euro bulls.

Market mood is extremely bullish as S&P500 has reached to near 4,000 levels in no time. Investors believe that the current decline in the US inflation rate is meaningful for a slowdown in the pace of hiking interest rates by the Federal Reserve (Fed). Also, the expectations of a recession situation have trimmed dramatically. Meanwhile, the US dollar index (DXY) has refreshed its three-month low at 106.28 as the risk aversion theme has lost its ground amid optimism in the overall market.

The 10-year US Treasury yields have dropped to 3.8% as chances for a fifth consecutive 75 basis point (bps) rate hike have dropped to a mere 17%, as per the CME FedWatch tool. It is worth noting that the US bond market was closed on Friday on account of Veterans Day. Therefore, power-pack action is expected on Monday.

Apart from that, a marginal increment in US long-term inflation expectations has not made any major impact on the strength of the risk appetite theme. Last week, the University of Michigan reported that five-year consumer inflation expectations have improved to 3.0% from the prior release of 2.9%.

This week, investors will keep an eye on Eurozone’s growth numbers, which are seen on Tuesday. As per the consensus, the annual Gross Domestic Data (GDP) is expected to remain stable at 2.1%. The economy is facing the turbulence of soaring inflation, energy crisis, and supply chain bottlenecks due to Russia-Ukraine tensions. Therefore, stable GDP data might be supportive of the shared currency.