What happened in the US session?
The DXY rose briefly against most major currency pairs following the release of the US PPI data. The S&P closed slightly lower, dragged down by a stronger DXY.
What does it mean for the Asia Session?
As the DXY signals a retracement, look for the major currencies 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?
The DXY surged strongly to the upside following the release of the US Core PPI and PPI at 0.5% and 0.7% respectively. DXY reached a high of 104.15 before retracing sharply back down to the 103.75 price area. With no major news events for the US and the markets heading into the weekend, the DXY could continue to trade lower. Look for the price to retest the 103.50 price level before developing a stronger directional bias. If the price breaks below 103.50, the next key support level is at 103.20.
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 Bearish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
Gold broke out of the consolidation which it had been trading within for 2 days, trading lower as the DXY strengthened. Gold reached a low of 1827 before trading higher, back into the consolidation range. If the DXY continues to weaken, and if Gold breaks above the 1846 price level strongly, this could signal further upside correction for Gold. Beyond 1846, the next key resistance level is at 1858.
Next 24 Hours Bias
Weak Bullish
The Australian Dollar (AUD)
Key news events today
No major news events.
What can we expect from AUD today?
The AUDUSD traded within a narrow 50pip range yesterday, apart from a brief spike lower. Price is likely to continue consolidating along the 0.69 price level with no clear directional bias. However, if the DXY continues to weaken further, look for the AUDUSD to break above the 0.6940 price level to signal the potential for further upside, with the next immediate resistance level at the round number price level of 0.70.
Central Bank Notes:
- Cash rate stands at 3.35%
- Future rate rises are expected as RBA targets the 2-3% inflation target.
- Next meeting on 7 March 2023
Next 24 Hours Bias
Weak Bullish
The Kiwi Dollar (NZD)
Key news events today
No major news events.
What can we expect from NZD today?
While the NZDUSD climbed briefly, the strength of the DXY led the NZDUSD to spike lower to test the 0.6230 price level overnight. However, the move lower was sharply retraced as the DXY retraced after reaching a new high. As the markets head toward the weekend, the NZDUSD could trade with choppy price action while maintaining below the 0.63 round number resistance level.
Central Bank Notes:
- Cash rate stands at 4.25%
- Central bank is likely to continue with the current path of rate adjustment
- Next meeting is on 21 February 2023
Next 24 Hours Bias
Weak Bullish
The Japanese Yen (JPY)
Key news events today
No major news events.
What can we expect from JPY today?
The USDJPY consolidated between the 133.60 and 134.50 price levels overnight, failing to break out strongly to the upside, despite the strength of the DXY. As the USDJPY retraces lower, following the price action of the DXY, look for the price to test and reject the 133.50 price level to signal further upside potential. I the USDJPY breaks through the 134.50 resistance level, price could climb higher to the next key resistance level of 137.50.
Central Bank Notes:
- Cash rate stands at -0.1%
- Expanded range for 10 year JGB yield fluctuations to 0.5%
- Next meeting is on 8 March 2023
Next 24 Hours Bias
Weak Bearish
