What happened in the US session?
Most major currency pairs traded significantly lower against the US Dollar as the DXY strengthened to reach a new high overnight.
What does it mean for the Asia Session?
Look for the DXY to continue strengthening, following the overnight momentum.
The Dollar Index (DXY)
Key news events today
USD Core PCE Price Index
What can we expect from DXY today?
Overnight, the USD GDP was released slightly lower than expected at 2.7% (Forecast: 2.9%). This saw the DXY spike down briefly but the price bounced strongly off the 104.40 price area to continue its upward momentum. As the DXY breaks above 104.55, look for the uptrend to continue. Look towards the Core PCE price index to be released today (Forecast: 0.4% Previous: 0.3%) to signal slightly faster than anticipated inflation growth. This could be indicative that further interest rate hikes would be required from the Federal Reserve, which could see the DXY trade higher, toward the next key resistance level of 105.50.
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?
Gold broke out of the previous consolidation with significantly choppy price action as the price spiked down to 1819 and retraced sharply. However, as the DXY continued to strengthen, this has led Gold to break below the key support level of 1820 and is likely to signal further downside pressures. Look for the price to break below 1819.50 price level before Gold could trade down the 1800 round number support 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?
The downward pressure continues for the AUDUSD as the price traded lower strongly, breaking below the round number support level of 0.68. If the DXY continues to strengthen, this could see the AUDUSD continue the downtrend and trade significantly lower. Anticipate significantly choppy price action, however, if the price breaks below the 0.6750 price level, the next key support level is at 0.6660.
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?
Overnight, the NZDUSD failed to sustain a move higher as the strength of the DXY dragged prices lower. As the NZDUSD attempts to break below the 0.62 price level, look for a strong breakout to the downside if the round number support level is breached. Further strength on the DXY could see the NZDUSD trade beyond the 0.62 support level, down toward the next key support level of 0.6075.
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
JPY BOJ Gov-Designate Ueda Speaks
What can we expect from JPY today?
The USDJPY traded higher to reach the 135.40 price area overnight, but the move higher was quickly retraced with the USDJPY trading back in the consolidative range of 134.80. Significant volatility is expected for the Japanese Yen as the market looks toward possible comments from BoJ Governor Designate Ueda regarding his stance on the current monetary policy. A hawkish view and suggestions over possible tightening could see the Japanese Yen strengthen strongly. This could lead the USDJPY to trade significantly lower, down to the 133 round number and key support level.
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
