What happened across the Asia session?
Most currencies continued to trade higher against the DXY during the Asia session as the DXY consolidates along the 103.35 price level.
What does it mean for Europe and US Sessions?
If the DXY continues to weaken, look for the major currencies to continue to gain against the US dollar.
The Dollar Index (DXY)
Key news events today
No major news events.
What can we expect from DXY today?
On Friday, the US employment data was released with the unemployment rate falling to 3.5% (Expected: 3.7%) and the non-farm employment change at 223k (Forecast: 200k). However, despite the positive employment data, the DXY failed to strengthen but instead weakened significantly. This was due to the reduced expectations for how high the Federal Reserve could hike interest rates in the future. Currently trading at the 103.31 price level, look for the DXY to break below the 103 price level to signal further downside potential, with the next key support level at 102.50.
Central Bank Notes:
- Federal Reserve hiked rates by 50bps taking interest rates to 4.50%
- Next meeting is on 2 February 2023
- Further rate increases are expected to slow
Next 24 Hours Bias
Weak Bearish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
Gold climbed strongly on Friday as the DXY weakened as the price broke out of the brief consolidation at the 1840 price level. Gold climbed toward the 1870 price level by the end of the trading week, with the current price action indicating the potential for further upside potential. Currently trading at the 1878 price, look for Gold to break above the 1880 price level to indicate a continuation of the uptrend, with the next key resistance level at 1900.
Next 24 Hours Bias
Weak Bullish
The Euro (EUR)
Key news events today
No Major News Events
What can we expect from EUR today?
The EURUSD climbed steadily on Friday, reversing the previous move lower, with the price trading just below the 1.07 round number resistance level. With no major news on the horizon for the Euro, look for the price to consolidate at the current level with a breakout potential to the upside. If the EURUSD breaks above the 1.07 resistance level, the next key resistance level is at 1.0950.
Central Bank Notes:
- Main Refinancing Rate is currently at 2.50%
- Significant and consistent rate hikes expected from the ECB
- Next meeting on 2 February 2023
Next 24 Hours Bias
Weak Bullish
The Swiss Franc (CHF)
Key news events today
No Major News Events
What can we expect from CHF today?
The USDCHF currently trades at the 0.9250 price level following the volatility of the DXY on Friday. The USDCHF reversed from the 0.94 round number resistance level down to the 0.9250 price level due to weakness of the DXY. Look for the price of the USDCHF to retrace to test the 0.93 price level before continuing to the downside, with the next key support level at 0.92.
Central Bank Notes:
- Current policy rate is at 1.00%
- Next meeting on 23 March 2023
Next 24 Hours Bias
Weak Bullish
The Pound (GBP)
Key news events today
No Major News Events
What can we expect from GBP today?
As the DXY weakened on Friday, the GBPUSD saw strong upside moves, with the price bouncing strongly from the 1.1860 price level. With the price of the GBPUSD breaking strongly beyond the resistance level of 1.21, expect a continuation of the uptrend. Currently trading at 1.2150, the GBPUSD could climb steadily toward the next key resistance level of 1.23, if the DXY continues to weak strongly.
Central Bank Notes:
- Interest rate is currently at 3.50%
- Peak inflation revised to more than 15% in 2023.
- Next meeting on 2 February 2023
Next 24 Hours Bias
Medium Bullish
The Canadian Dollar (CAD)
Key news events today
No Major News Events
What can we expect from CAD today?
The USDCAD traded significantly lower, as the price reverses from the 1.3660 price level, down to the 1.34 round number support level. This move lower was due to the weakness in the DXY and the release of stronger than expected employment data from Canada. The unemployment rate dropped slightly from 5.1% to 5.0% and the employment change data rose strongly to reach 104k (Expected 5.5k). Look for the USDCAD to retrace briefly before further downside potential, with the next key support level at 1.32.
Central Bank Notes:
- Increased interest rates to 3.75%
- Surprised markets with only 50bps hike in October
- Future hikes determined by future inflation data and expectations
- Next meeting on 25 January 2022
Next 24 Hours Bias
Weak Bullish
Oil
Key news events today
No Major News Events
What can we expect from Oil today?
Energy prices continued to trade within a narrow range as the uncertainty over the Federal Reserve’s rate path cast doubt over the global economic performance. The WTI trades just below the 75.00 price level, with a breakout potential toward the next key resistance level at 78.00 while Brent maintains below 80.00, with the next key resistance level at 82.00.
Next 24 Hours Bias
Weak Bullish
