What happened in the US session?
The DXY rose briefly against most major currency pairs following the release of the US retail sales data. The S&P closed slightly higher by 0.28% at the 4,147 price level.
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
USD Core PPI m/m
USD PPI m/m
What can we expect from DXY today?
The US retail sales data was released at 3% (Forecast: 1.9%) overnight, surprising markets with a significantly better-than-expected result. This caused the DXY to spike to the upside, testing the 104-round number resistance level. However, the move higher was unsustained as the DXY failed to break through the resistance and retraced. Currently trading at the 103.55 price level, the DXY could continue to retrace lower to test the 103-round number support level before trading higher again.
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?
While Gold traded lower earlier in the trading session yesterday, the price consolidated along a tight price range along the 1833 price level. With the current retracement of the DXY, Gold has retraced to the upside and is currently trading at the 1841 price level. While further retracement to the upside can be expected, with 1850 a target level, look for the price action to indicate a reversal and a continuation of the downtrend. If the price rejects the 1850 price level, Gold could slide further, with the immediate support level at 1833 and the next key support level at 1800.
Next 24 Hours Bias
Weak Bearish
The Australian Dollar (AUD)
Key news events today
AUD Employment Change
AUD Unemployment Rate
What can we expect from AUD today?
Earlier today, the Australian unemployment rate and employment change data was released. As the data indicated worse than expected situation with the unemployment rate increasing to 3.7% and employment change dropping by -11.5k, the AUDUSD spiked lower to retest the overnight low. However, as the DXY retraces, the AUDUSD rejected the low to bounce higher. Look for the AUDUSD to complete the retracement and to break below the 0.69 price level to signal a continuation of the downtrend, with the next key support level 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 in a similar fashion to the AUDUSD as the price bounced off the 0.6260 price area to retrace higher. With no major news events for the NZD, volatility of the NZDUSD is likely to follow the DXY. Look for the NZDUSD to break above the 0.63 round number resistance level to trade higher, as the DXY weakens. However, if the NZDUSD fails to break above 0.63 strongly, the price could reverse lower toward 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 rose toward the 134.50 price area as the DXY climbed higher overnight. With the persistent weakness in the Yen, further upside is anticipated on the USDJPY. Currently, the USDJPY is trading at the 133.80 price level and could retrace lower. Look for completion of the retracement before further upside potential. If the price continues to trade higher the immediate resistance of 135 could be breached, with the next key resistance at 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
