What happened across the Asia session?
Most major currencies consolidated against the US dollar during the Asia trading session.
What does it mean for Europe and US Sessions?
Look out for choppy price action as the markets head into the weekend.
The Dollar Index (DXY)
Key news events today
No major news events.
What can we expect from DXY today?
The DXY fell to retest the 102.50 price level overnight. However, the move lower was unsustained as the price rebounded sharply to end the trading session at the 103.15 price level. Following such price volatility and the rejection of the downside, anticipate further upside for the DXY. With no major news events, the volatility in the DXY was likely due to the movement of the EURUSD. If the DXY continues to trade higher, look for the price to break above the immediate near term resistance of 103.30, with the next key resistance level at 103.85.
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 Bullish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
As the DXY saw significant volatility but ended the session stronger overnight, this resulted in Gold trading significantly lower. Gold reversed strongly from the 1890 price level, breaking below the recent low of 1870 to form a new low at the 1860 price area. While further moves to the downside can be anticipated, look for Gold to retrace briefly before trading lower again, with the key support level area at the 1800 and 1790 price range.
Next 24 Hours Bias
Medium Bearish
The Euro (EUR)
Key news events today
EUR EU Economic Forecasts
What can we expect from EUR today?
The EURUSD fluctuated within a 100pip range overnight as prices climbed to a high of 1.08 before reversing strongly again. As the EURUSD trades slightly above the 1.07 round number support, look toward the DXY to signal the next directional bias. If the DXY continues to strengthen, the EURUSD could break the support level to trade significantly lower, down to the next key support level of 1.05. With the EU Economic Forecast to be released today, anticipate significant volatility on the EURUSD.
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 failed to break below the 0.9160 price level and traded significantly higher as the price was dragged up by the strength of the DXY overnight. Offsetting the recent downward move, the USDCHF currently trades along the 0.9235 price area, with further upside potential if the DXY continues to strengthen. Alternatively, if the DXY retraces, the USDCHF could reverse from the current level, down to the near term support of 0.9180.
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
GBP GDP m/m
What can we expect from GBP today?
Overnight, the GBPUSD strengthened, climbing to the 1.22 price area but failed to break above the round number resistance level. Coupled with the strengthening of the DXY, the GBPUSD reversed strongly to the downside and currently trades just below the 1.21 price level. With the GDP m/m to be released today and forecasts indicating -0.3% (Previous: 0.1%), this could see further weakness for the GBP. Look for the price to retest the 1.21 price level and for the price action to signal a rejection of the round number resistance level to signal further downside potential, with the next key support level at 1.1960.
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
CAD Employment Change
CAD Unemployment Rate
What can we expect from CAD today?
The USDCAD traded significantly higher from the 1.3380 price level as the price climbed steadily beyond the near term resistance of 1.3450. If the DXY continues to strengthen, this could see the USDCAD continue with the upward momentum toward the key resistance level of 1.3560. An additional driver to the upside could come from the release of employment data for the Canadian economy today. Employment change (Forecast: 15k Previous: 104k) and Unemployment Rate (Forecast: 5.1% Previous: 5.0%) is expected to signal a weakening from the previous month, which could see the Canadian dollar weaken. If the USDCAD resumes with the uptrend, the near term key resistance level is at 1.3560.
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?
Energy prices retraced to the downside overnight, following the recovery in strength on the DXY. However, with the anticipated increase in demand from China providing relative support, prices could resume trading higher following the completion of the current retrace. WTI fell to test the 76.65 price level up and reversed sharply back toward 78.00. Brent is currently trading at the 84 price area, with further upside potential after the retracement. Anticipating further upside potential, look for WTI and Brent to rise toward the key resistance level of 82.00 and 89.00 respectively.
Next 24 Hours Bias
Weak Bullish
