What happened across the Asia session?
Most major currencies continued to trade in consolidation during the Asia session, with prices relatively unchanged.
What does it mean for Europe and US Sessions?
Look out for a possible continuation with the major currencies losing ground against a strengthening DXY.
The Dollar Index (DXY)
Key news events today
No major news events.
What can we expect from DXY today?
The DXY reversed strongly from the 103.90 price area, trading down to the 102.90 price area. However, the downward move was unsustained as the price reversed sharply higher above the 103 price level. The volatility in the DXY was due to the comments from Fed Chair Powell, indicating that ‘he expects 2023 to be a year of significant declines in inflation’. With the price currently at 103.22, the DXY could trade higher if the current price action indicates a rejection of the downside, with the immediate resistance level at the round number level of 104.
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?
Despite the volatility in the DXY overnight, Gold continued to consolidate in a narrow price range between the 1860 and 1885 levels. Gold could trade slightly higher before trading lower again. Look for price action on Gold to test and reject the 1890 price level. A lower level confirmation of the downside would be signaled if Gold breaks below the 1860 price level, with the next key support level at 1800.
Next 24 Hours Bias
Weak Bearish
The Euro (EUR)
Key news events today
No Major News Events
What can we expect from EUR today?
The EURUSD continues trading along the 1.0730 price level despite the significant volatility overnight. The downward pressure on the EURUSD is likely to continue, especially if the DXY recovers with strength. Look for the price to break below the 1.07 round number support level to signal further downside potential, with the next key support level at 1.0540.
Central Bank Notes:
- Main Refinancing Rate is currently at 3.00%
- Another 50bps rate hike is to be expected for the next meeting.
- Next meeting on 16 March 2023
Next 24 Hours Bias
Weak Bearish
The Swiss Franc (CHF)
Key news events today
No Major News Events
What can we expect from CHF today?
The USDCHF traded lower down to the key support level of 0.92 as the DXY weakened briefly overnight. However, the downward move was sharply reversed as the USDCHF climbed to close along the 0.9220 price level. Look for a recovery in the DXY to bring the USDCHF higher, toward the near immediate resistance level of 0.9270.
Central Bank Notes:
- Current policy rate is at 1.00%
- Next meeting on 23 March 2023
Next 24 Hours Bias
Weak Bearish
The Pound (GBP)
Key news events today
No Major News Events
What can we expect from GBP today?
The GBPUSD currently trades along the 1.2050 price level following the significant volatility overnight. While the downtrend persists, look for potential selling opportunities on the GBPUSD if the price action shows a rejection of the interim resistance level. However, for the GBPUSD to move lower, the DXY would have to recover in strength. The downside on GBPUSD could be limited at the near term support level of 1.1970.
Central Bank Notes:
- Interest rate is currently at 4.00%
- The BoE could pause on further interest rate hikes.
- Next meeting on 23 March 2023
Next 24 Hours Bias
Weak Bearish
The Canadian Dollar (CAD)
Key news events today
No Major News Events
What can we expect from CAD today?
The USDCAD fluctuated between 1.3385 and 1.3470 overnight as the DXY saw volatility increase due to Fed Chair Powell’s speech. With the price currently trading below the 1.34 round number level, a recovery in strength on the DXY could see the price break above the resistance level to trade higher toward the near-term resistance level of 1.3470.
Central Bank Notes:
- Increased interest rates to 4.50%
- Indicated that the BoC was likely to pause on future rate hikes.
- Next meeting on 8 March 2023
Next 24 Hours Bias
Weak Bearish
Oil
Key news events today
No Major News Events
What can we expect from Oil today?
Following the closure of a major export terminal in Turkey following the massive earthquake that struck the country early on Monday and a higher forecast for Chinese demand saw energy prices climb higher. WTI bounced from the 75.00 price level up toward the 77.30 price level overnight. Similarly, Brent traded higher from 82.00 up toward 84.00. If the upward momentum continues, WTI and Brent could trade higher toward the immediate near-term resistance level of 80.00 and 86.00 respectively.
Next 24 Hours Bias
Weak Bullish
