What happened in the US session?
Most major currency pairs traded with significantly choppy price action as the DXY fluctuated in a wide range. The S&P closed lower by 2%, breaking below the 4,000 price level.
What does it mean for the Asia Session?
Look for increased price volatility following the RBNZ rate decision.
The Dollar Index (DXY)
Key news events today
No major news events.
What can we expect from DXY today?
The DXY spiked and dipped between the 103.70 and 104.20 price range overnight as the market volatility returned following the US Bank holiday. US Manufacturing and Services PMI was released stronger than expected, which resulted in the DXY trading higher overall. Currently trading below the 104 round number level, the DXY could trade lower briefly to retest the 103.50 price level. If the price breaks below 103.50, the DXY could trade significantly lower to the next key support level at 102.85.
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?
Gold traded with significant volatility with no clear directional bias. However, anticipating some downside on the DXY, Gold could trade higher in the interim. Look for the price to break above the 1839 price level to signal a more sustained move to the upside. Look for Gold to retest the previous swing high 1843, with the key resistance level at the 1850 price level.
Next 24 Hours Bias
Weak Bullish
The Australian Dollar (AUD)
Key news events today
AUD Wage Price Index q/q
What can we expect from AUD today?
The AUDUSD spiked lower following the release of the wage price index which was released at 0.8% (Forecast: 1%). However, the move lower was quickly retraced with the AUDUSD trading along the 0.6850 price level. The AUDUSD could see choppy price action as the downward pressure is offset by the upward move on the NZDUSD following the RBNZ interest rate decision. If the price closes below 0.6800, the AUDUSD could trade lower toward the 0.6680 support 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 Bearish
The Kiwi Dollar (NZD)
Key news events today
NZD Official Cash Rate
NZD RBNZ Monetary Policy Statement
NZD RBNZ Rate Statement
What can we expect from NZD today?
The RBNZ increased rates by 50bps to take interest rates to 4.75%. This decision saw the NZDUSD spike up from the 0.6220 price level, up to the 0.6250 level. However, the move higher has retraced back to the starting level. This indicates a downward pressure on the NZDUSD. If the NZDUSD breaks below the 0.62 round number support level, further downside could be anticipated, with the next key support level at 0.6040.
Central Bank Notes:
- Cash rate stands at 4.75%
- Central bank is likely to continue with the current path of rate adjustment
- Next meeting is on 5 April 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 climbed steadily to the upside reaching a high of 135.25 as the DXY strengthened yesterday. However, with the BoJ releasing comments about the need to review the current monetary policy and the possibility of introducing tightening measures, these have capped the potential upside for the USDJPY. The USDJPY currently trades at the 134.75 price level with price action signaling further downside potential, with the immediate key support level at the round number support level of 134.00.
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
Weak Bullish
