What happened in the US session?
The US dollar recovered in strength, reversing recent downside, as the other major currencies weakened on Friday. The S&P closed slightly higher by 0.22% at the 4,090 price level.
What does it mean for the Asia Session?
Look for the major currencies to consolidate briefly before weakening further against the DXY.
The Dollar Index (DXY)
Key news events today
No major news events.
What can we expect from DXY today?
The DXY resisted moves to the downside as the price action rejected the 102.90 price level to trade significantly higher on Friday, ending the week at the 103.50 price level. With the uptrend holding strong, a further brief move to the upside can be expected for the DXY. Early in the trading session today, the DXY climbed to test the 103.75 price area, signaling a confirmation of the upside potential. Look for the DXY to break above 103.75 to indicate a continuation of the uptrend, with the next key resistance level at 104.50.
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?
While the DXY strengthens, Gold saw further pressure to the downside as the price ranged between 1854 and 1870 on Friday. Currently trading at the 1861 price level, look for a breakout potential, to the downside, especially if the price closes strongly below 1856. Further strengthening of the DXY could see the price of Gold trade significantly lower, with the lower key support level area of 1800 and 1790 a possible target level.
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?
Through the trading session on Friday, the AUDUSD traded above the 0.69 price level as the downward momentum failed to break below the round number support level. The price action was choppy as the AUDUSD fluctuated between the 0.69 and 0.6950 price levels. Currently, as the DXY strengthens, the AUDUSD faces renewed downward pressure as the price breaks below 0.69. If the AUDUSD closes strongly below 0.69, significant moves to the downside could be expected, with the next key support level at 0.67.
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 Bearish
The Kiwi Dollar (NZD)
Key news events today
No major news events.
What can we expect from NZD today?
The downside pressure continues for the NZDUSD as the current price action indicates the potential to break below the round number support of 0.63. With no major news events ahead for the NZD, further downside moves on the NZDUSD would be highly dependent on further strength in the DXY. If the price breaks below the support level strongly, the next key support level is at 0.6100.
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?
On Friday, the USDJPY spiked to the downside, rejecting the 131.50 price level to test the 129.90 price level, following the news release from the BoJ regarding the appointment of Kazuo Ueda as the next BoJ Governor. However, the move lower was brief with renewed DXY strength taking the USDJPY higher again, leading the price to end the week just below the 131.50 price level. Early today, as the DXY continues to strengthen, and with the USDJPY trading just below the 132 price level, further upside could be anticipated. Look for the price to break above the 132-round number resistance level to signal further upside potential, with the next key resistance level at 132.65.
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
