What happened across the Asia session?
Most currencies consolidate during the Asia session as the DXY continues to trade along the 103 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?
Overnight, the DXY traded with significant volatility as markets looked toward the speech from Chair Powell. However, with no definitive comments regarding future policy decisions, the DXY fluctuated between the 102.75 and 103.30 price range throughout the trading session. Currently, trading at the 103 price level, the DXY could continue to retrace higher toward the key resistance level of 103.50 before reversing lower again. Following the downtrend, look for the DXY to complete the retracement and trade below the 103 price level to indicate further downside potential, with the next key support levels at 102.50 and 102.00.
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 traded in a consolidation between the 1870 and 1880 price levels through the trading session yesterday. It is likely that Gold could continue to consolidate at this level in the interim, with a breakout potential to the upside. Look for further weakness in the DXY and the development of the price action to indicate further upside potential, especially if the price breaks 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 traded between the 1.0720 and 1.0750 price range overnight. Although there are no major news events for the Euro on the horizon, look for a potential break out to the upside, especially if the DXY continues to weaken. Look for the EURUSD to trade higher if the price breaks above the 1.0760 price level, with the next key resistance level 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?
Despite the volatility in the DXY overnight, the USDCHF traded in a relatively consolidative tone following a brief surge to the upside. The USDCHF failed to break above the 0.9250 price level, consolidating along the 0.9230 price level. While a breakout could be likely, the upside potential could be limited by the resistance level of 0.9260. Look for the USDCHF to reverse and trade lower toward the key support level of 0.9180.
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?
The GBPUSD traded with significant volatility overnight as the price rejected the 1.22 round number resistance level and spiked lower, down to the 1.2110 price level. However, the move lower was unsustained as the GBPUSD reversed sharply before trading at the 1.2150 price level toward the end of the trading session. Look for the GBPUSD to break out to the upside if the price closes strongly over the 1.2150 level, with the next key resistance levels at 1.22 and 1.23.
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
Weak Bullish
The Canadian Dollar (CAD)
Key news events today
No Major News Events
What can we expect from CAD today?
Overnight, as the DXY retraced briefly to the upside, the USDCAD bounced off the support level of 1.3370 to trade higher toward the 1.3450 price area. Currently trading at the 1.3435 price level, look for the USDCAD to complete the retracement higher before testing lower again. However, for the USDCAD to trade lower would require a resumption of weakness in the DXY. If the USDCAD breaks below the 1.34 round number support level, the price could continue to slide lower toward the next key support level of 1.33.
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
Crude Oil Inventories
What can we expect from Oil today?
Overnight, energy prices traded in a similar fashion to the previous day, with choppy price action testing higher briefly before ending the session lower again. WTI climbed to the 75.90 price level before trading lower to consolidate at the 74.50 price level. Look for the WTI to continue ranging between the 74.00 and 76.00 price level. Brent retested the 81.00 price area before trading lower to the 79.45 price level overnight. Look for Brent to consolidate at this price level in the interim, with the downward momentum toward the key support level at 78.00.
Next 24 Hours Bias
Weak Bearish
