What happened in the US session?
The US dollar strengthened strongly following the release of the non-farm employment change data. The S&P closed lower by -1.04% at the 4,136 price level.
What does it mean for the Asia Session?
Look for a brief retracement on the major currencies before a continuation of the downside if the DXY continues to strengthen.
The Dollar Index (DXY)
Key news events today
No major news events.
What can we expect from DXY today?
The DXY climbed steadily to the upside reaching the 103 price area last week. This move higher was due to the release of significantly stronger than expected Non-Farm employment change data at 517k (Forecast: 193k) and a drop in the unemployment rate to 3.4%. The DXY could continue trading higher to the next key resistance level of 105 but would first have to break beyond the current resistance level of 103.
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
Medium Bullish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
Gold reversed strongly from the 1960 price area as the DXY strengthened, trading down to the 1865 price level on Friday. At the current price level of 1875, look for Gold to retrace up to retest the round number price level of 1900. However, the downtrend is likely to maintain, especially if the DXY continues to strengthen. If Gold breaks below the 1850 price level, further moves downside can be anticipated with the next key support level at 1800.
Next 24 Hours Bias
Medium Bearish
The Australian Dollar (AUD)
Key news events today
No major news events.
What can we expect from AUD today?
Last week, the AUDUSD reversed strongly from the 0.7150 price area, ending the trading week at the 0.6915 price level. With the RBA interest rate decision due tomorrow, the AUDUSD could consolidate along the current price level for the interim. A retracement to the upside to test the 0.70 price level could be possible. However, if the price breaks below the 0.69 price level, look for the AUDUSD to trade lower toward the next key support level 0.68
Central Bank Notes:
- Cash rate stands at 3.10%
- Future rate rises will be determined by data, the outlook for inflation, and the labour market.
- Next meeting on 7 February 2023
Next 24 Hours Bias
Weak Bearish
The Kiwi Dollar (NZD)
Key news events today
No major news events.
What can we expect from NZD today?
On Friday, the NZDUSD broke through the 0.6450 price level to trade significantly lower, ending the trading week at the 0.6325 price level. This move lower was due to the strength of the DXY. The NZDUSD is likely to consolidate along the current price level with a retrace briefly to retest the 0.6350 price level before trading lower again. Look for the price action to indicate a rejection of further upside move, signaling further downside potential, with the next key support area at the round number price level of 0.62.
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 Bearish
The Japanese Yen (JPY)
Key news events today
No major news events.
What can we expect from JPY today?
The USDJPY saw significant moves upside on Friday, as the DXY strengthened due to better-than-expected non-farm employment change data. The price broke out from the 128 price area to surge strongly up towards the 131 round number resistance level. Early in the trading session today, the USDJPY continued trading higher to the 132.25 price level. Anticipate further upside if the DXY continues to strengthen, with the next key resistance at the 134-round number level.
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
Medium Bearish
