What happened in the US session?
The DXY traded with significant volatility due to the release of the US CPI, while equity markets closed lower at the 4,136 price level.
What does it mean for the Asia Session?
Look for the major currencies to continue losing ground against the DXY, with further strength expected for the US dollar.
The Dollar Index (DXY)
Key news events today
USD Retail Sales m/m
USD Core Retail Sales m/m
What can we expect from DXY today?
Overnight, the US CPI surprised markets as it was released at 6.4% which was slightly higher than the forecast of 6.2%. The data spurred significant volatility in the DXY as the price spiked up to the 103.20 price level before replacing sharply to retest the 102.45 price area. However, as the inflation did not fall as much as expected, the expectation for further rate increases from the Feds has increased. The DXY, currently trading at 103.23, is anticipated to continue climbing to the upside, with the next key resistance level at 103.80. Look out for the US retail sales data to be released today (Forecast: 1.9% Previous: -1.1%) could provide additional upside potential for the DXY.
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?
As markets anticipate further strengthening of the DXY, the price action on Gold signaled further downside potential. Trading lower overnight from the 1870 price level, Gold is currently at the key support level of 1850. If the price breaks below 1850, Gold could slide further, with the immediate support level at 1845 and the next key support level at 1800.
Next 24 Hours Bias
Weak Bearish
The Australian Dollar (AUD)
Key news events today
AUD RBA Gov Lowe Speaks
What can we expect from AUD today?
the AUDUSD rejected the 0.70 round number resistance level to trade significantly lower, driven lower by the strength of the DXY. As the AUDUSD breaks out of the previous consolidation and below the 0.6950 price level, look for a continuation of the downside. With the AUDUSD currently trading at the 0.6945 price level, look for the price to trade down to the 0.69 price level, and beyond that, the next key support level is at 0.6750.
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 NZDUSD traded with significant volatility overnight as the price fluctuated widely between the 0.63 and 0.6390 price levels. However, early in the trading session today, the NZDUSD traded lower as the downward pressure from the strength of the DXY continued. Currently trading at the 0.6310 price level, look for the NZDUSD to break below 0.63 to signal stronger downward potential, with the next key support level at 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 traded significantly higher as prices was dragged higher due to a combination of a stronger DXY and the persistently weaker Yen. Currently trading just below the round number resistance of 133, look for the price to break above the resistance level to signal further upside potential, with the price likely to climb higher toward the next key resistance level of 135.00.
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
