The DXY is oscillating below 112.00 and may display more weakness amid an upbeat market mood. (Pivot Orderbook analysis)

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• The DXY is oscillating below 112.00 and may display more weakness amid an upbeat market mood.
• Escalating US recession fears have capped the DXY’s upside.
• The continuation of the Fed’s policy tightening has resulted in lower estimates for retail real estate demand.

The pair currently trades last at 111.97.

The previous day high was 112.45 while the previous day low was 111.77. The daily 38.2% Fib levels comes at 112.03, expected to provide resistance. Similarly, the daily 61.8% fib level is at 112.19, expected to provide resistance.

The US dollar index (DXY) has shifted its business below 112.00 as the risk-on impulse is catching up with severe recognition from the market participants. On Tuesday, the upside in the mighty DXY remained capped around 112.40 amid escalating recession fears in the US.

A sluggish performance by the DXY despite solid chances of the fourth consecutive 75 basis points (bps) rate hike announcement by the Federal Reserve (Fed) has exposed the asset for more support. While solid bets for a bigger Fed rate hike have kept yields at elevated levels. The 10-year US Treasury yields hold their status above 4%.

Commentaries from shark banks amid the continuation of policy tightening measures by the Fed have accelerated the risk of recession. Strategists at J.P. Morgan this week cited that they are cutting back on their delivery longs in equities and trimming their underweight position in bonds due to increased risk that central banks will make a hawkish policy error, reported Reuters.

Also, Fitch, on the US says that Fed’s aggressive tightening cycle will increasingly weigh on job growth and consumer demand in 2023. Higher inflation and interest rates will trim real wages and will have consequences on household income and eventually on consumer spending.

Wednesday’s Housing Starts data that reflects retail demand for real estate will remain in the spotlight. The economic data is expected to decline to 1.475M against the former release of 1.575M. It seems that accelerating interest rates by the Federal Reserve (Fed) have started displaying their consequences. Higher interest rates are forcing retailers to postpone their demand for personal property.

Technical Levels: Supports and Resistances

EURUSD currently trading at 111.97 at the time of writing. Pair opened at 112.06 and is trading with a change of -0.08 % .

The pair is trading below its 20 Daily moving average @ 112.51, above its 50 Daily moving average @ 110.31 , above its 100 Daily moving average @ 107.9 and above its 200 Daily moving average @ 103.54

The previous day high was 112.45 while the previous day low was 111.77. The daily 38.2% Fib levels comes at 112.03, expected to provide resistance. Similarly, the daily 61.8% fib level is at 112.19, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 111.74, 111.42, 111.06
• Pivot resistance is noted at 112.42, 112.77, 113.09

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