What happened in the US session?
Markets traded in a consolidation overnight as the US market was closed, with most major currencies trading within a narrow range.
What does it mean for the Asia Session?
Look for increased price volatility and a potential breakout as market liquidity returns.
The Dollar Index (DXY)
Key news events today
USD Flash Services PMI
USD Flash Manufacturing PMI
What can we expect from DXY today?
The DXY remained below the 104 price level overnight. However, as the price rejects the 103.70 price level, look for a potential breakout to the upside with market volatility expected to return. With the services and manufacturing PMI data expected to indicate a slight increase, look for the DXY to break above the 104 price level to signal further upside potential, with the near term high of 104.60 a potential target level.
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?
Overnight, Gold fluctuate along the 1845 price level with no directional bias as the market consolidated. While the price remains below the 1850 price level, a rejection of the resistance could lead to a resumption of the downside for Gold, down toward the support level of 1820. Alternatively, if the price breaks out above 1850, Gold could continue with the correction to the upside, with the next immediate resistance at 1870.
Next 24 Hours Bias
Weak Bullish
The Australian Dollar (AUD)
Key news events today
AUD Monetary Policy Meeting Minutes
What can we expect from AUD today?
The RBA monetary policy meeting minutes was released today, highlighting the key points that the board agreed that additional rate hikes were likely in the coming months and that a 25 or 50bps hike was considered at the previous meeting. This saw the AUDUSD spike up briefly but the price remains trading along the 0.69 price level. Anticipating brief strength in the DXY, the AUDUSD could trade lower, down to the 0.6870 price level. However, if the AUDUSD breaks out above 0.6930, further upside could be expected, with the next key resistance at the 0.70 price level.
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?
The NZDUSD fluctuated under the 0.6260 price level overnight, as the DXY consolidated. However, the current price action on the NZDUSD indicates the potential for a breakout to the upside. If the price trades beyond 0.6270, the NZDUSD could continue to climb higher toward the near term resistance and round number level of 0.63.
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 22 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?
Early in the trading session today, the USDJPY broke out of the overnight consolidation and is currently trading at the 134.50 price level. Expect significant volatility on the Japanese Yen as the market speculates on a potential adjustment to the monetary policy, either by the current Governor or his successor. If the USDJPY breaks strongly to the upside, the price could climb toward the near term high of 135, with the key resistance level at 138. However, it is likely that the USDJPY could continue to fluctuate between 134.50 and 133.50.
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
