What happened across the Asia session?
Most major currencies consolidated against the DXY during the Asia session.
What does it mean for Europe and US Sessions?
Look out for higher volatility in price in the US market with the US Core PCE price index to be released and as markets head toward the weekend.
The Dollar Index (DXY)
Key news events today
USD Core PCE Price Index
What can we expect from DXY today?
Overnight, the USD GDP was released slightly lower than expected at 2.7% (Forecast: 2.9%). This saw the DXY spike down briefly but the price bounced strongly off the 104.40 price area to continue its upward momentum. As the DXY breaks above 104.55, look for the uptrend to continue. Look towards the Core PCE price index to be released today (Forecast: 0.4% Previous: 0.3%) to signal slightly faster than anticipated inflation growth. This could be indicative that further interest rate hikes would be required from the Federal Reserve, which could see the DXY trade higher, toward the next key resistance level of 105.50.
Central Bank Notes:
- Federal Reserve hiked rates by 25bps taking interest rates to 4.75%
- Next meeting is on 23 March 2023
- Ongoing rate increases will be expected
Next 24 Hours Bias
Weak Bullish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
Gold broke out of the previous consolidation with significantly choppy price action as the price spiked down to 1819 and retraced sharply. However, as the DXY continued to strengthen, this has led Gold to break below the key support level of 1820 and is likely to signal further downside pressures. Look for the price to break below 1819.50 price level before Gold could trade down the 1800 round number support level.
Next 24 Hours Bias
Medium Bearish
The Euro (EUR)
Key news events today
No major news events.
What can we expect from EUR today?
Overnight, the EURUSD traded strongly lower, down to the key support level and price area of 1.06. This move lower was primarily due to the strength of the DXY. While the EURUSD is likely to retrace briefly, look for the price to continue trading below 1.06 to signal further downside potential toward the next key support level of 1.0490. However, as the market heads toward the weekend, look out for potentially choppy price action along the key support level.
Central Bank Notes:
- Main Refinancing Rate is currently at 3.00%
- Another 50bps rate hike is to be expected for the next meeting.
- Next meeting on 16 March 2023
Next 24 Hours Bias
Medium Bearish
The Swiss Franc (CHF)
Key news events today
No major news events.
What can we expect from CHF today?
The USDCHF continued with its uptrend as the price rose from the 0.9290 price area up toward 0.9345. Again, directional bias of the USDCHF is heavily driven by the price volatility of the DXY. Look for the USDCHF to retrace briefly, possibly retest the 0.9230 price level before trading higher again. If the USDCHF breaks above the 0.9350 level, the next key resistance is at the round number level of 0.94.
Central Bank Notes:
- Current policy rate is at 1.00%
- Next meeting on 23 March 2023
Next 24 Hours Bias
Weak Bearish
The Pound (GBP)
Key news events today
No major news events.
What can we expect from GBP today?
Similar to the other major currency pairs, the GBPUSD traded down to the 1.20 round number support level overnight, due to the strength of the DXY. However, the price has maintained above the 1.20 price level and could signal that a strong support has been found at the round number level. This could lead to a bounce on the GBPUSD back toward 1.2050 and 1.21 price levels. However, the downside pressure is likely to persist. If the DXY strengthens, look for the GBPUSD to break beyond the 1.20 level and trade down to the next key support level of 1.1850.
Central Bank Notes:
- Interest rate is currently at 4.00%
- The BoE could pause on further interest rate hikes.
- Next meeting on 23 March 2023
Next 24 Hours Bias
Weak Bearish
The Canadian Dollar (CAD)
Key news events today
No major news events.
What can we expect from CAD today?
Despite the overnight strength of the DXY, the USDCAD saw relatively low price volatility. The USDCAD traded slightly higher to reach the 1.3580 price level but retraced quickly from the near term high. Look for the USDCAD to potentially retest the 1.35 round number level again before forming its next directional move. If the DXY continues to strengthen, the USDCAD could trade significantly higher toward the next key resistance level of 1.3710.
Central Bank Notes:
- Increased interest rates to 4.50%
- Indicated that the BoC was likely to pause on future rate hikes.
- Next meeting on 8 March 2023
Next 24 Hours Bias
Weak Bearish
Oil
Key news events today
No Major News Events
What can we expect from Oil today?
Energy traded slightly higher following the release of news that Russia plans on cutting oil exports to European and Atlantic buyers. However, while WTI and Brent traded higher, prices are likely to reverse and continue trading lower. Look for WTI to trade down to the 74.00 price level and for Brent to retest the near term support level of 80.00.
Next 24 Hours Bias
Weak Bearish
