EUR/USD sees upside above 1.0220 amid broader weakness in DXY, US GDP eyed

•  EUR/USD is looking to surpass 1.0220 to record more gains as DXY has extended losses.
• Fed’s consecutive rate hike by 75 bps has failed to support the DXY.
• This week, the GDP data from the US and Eurozone will remain in limelight.

The EUR/USD pair is displaying a tad higher range oscillation around 1.0200 in the Asian session. The asset is likely to extend the prior recovery after overstepping late Tuesday’s high at 1.0220. Plummeting US dollar index (DXY) has underpinned the risk-on market mood and the risk-sensitive currencies are capitalizing on the same.

The DXY has recaptured the three-week low around 106.10 and more losses are on the cards as commentary from Federal Reserve (Fed) has confirmed a slump in retail demand. Price pressure has been hurting the households and the retail demand took the bullet, which was visible after the US Consumer Confidence dropped to the lowest since February 2021 to 95.7.

Fed chair Jerome Powell announced a consecutive rate hike by 75 basis points (bps) and laid down a target of 3.5% interest rates by the end of 2022.

Now, investors will focus on US Gross Domestic Product (GDP) numbers for further guidance on the asset. A preliminary estimate for the US GDP data is 8% against the prior release of 8.3% on a quarterly basis. While the annualized figure will significantly improve to 0.4% vs. -1.6% in the prior release.

On the eurozone front, soaring odds of an energy crisis are escalating the expectations of recession as Russia has cut off energy supply from its main pipeline to Europe. The core member of the European Union (EU), Germany may face severe heat amid its higher dependency on Russian energy imports. Also, the eurozone GDP is of utmost importance, which is seen lower at 3.4% vs. 5.4% in the former period.