What happened across the Asia session?
Most major currencies consolidated against the US dollar with brief upside moves during the Asia trading session.
What does it mean for Europe and US Sessions?
Look out for significant price volatility with the DXY and across all major currency pairs on the release of the US CPI data today.
The Dollar Index (DXY)
Key news events today
USD CPI m/m
USD CPI y/y
USD Core CPI m/m
What can we expect from DXY today?
The DXY is likely to see significant volatility today with the US CPI (Forecast: 6.2% Previous: 6.5%) due to be released. A slowdown in inflation growth, with CPI of 6.2% or less, could see the DXY trade significantly lower, with markets likely to anticipate a decreasing likelihood of further interest rate hikes from the Federal Reserve. With the DXY currently trading along the 103.10 price level, weakness in the DXY could see the price slide lower toward the key support level of 102.50.
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
Medium Bearish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
Through the trading session yesterday, Gold traded slightly lower, breaking out of the consolidation along the 1860 price level to test 1851. However, as the DXY weakened, this spurred some upside in Gold with the price bouncing off the 1851 price level. Anticipating further weakness in the DXY, Gold could trade significantly higher. Look for the price to break above the 1865 price level strongly to signal further upside, with the next key resistance level at 1875.
Next 24 Hours Bias
Weak Bullish
The Euro (EUR)
Key news events today
No major news events.
What can we expect from EUR today?
Similar to the other major currency pairs, the Euro gained against the US dollar overnight. Currently trading at the 1.0735 price level, the EURUSD is likely to consolidate in the short term, with the US CPI data release pending. If the price breaks above the 1.0790 price level, the EURUSD could trade significantly higher toward the 1.0930 key resistance level. However, watch out for potential interim resistance level at 1.0825.
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
Medium Bullish
The Swiss Franc (CHF)
Key news events today
No major news events.
What can we expect from CHF today?
The USDCHF traded significantly lower from the 0.9260 price area, down to the 0.9180 level as the CHF CPI released yesterday signaled the potential for further rate increases from the SNB. While prices are like to consolidate at this current level, look for an upset on the US CPI data today, which could see a strengthening of the DXY, leading the USDCHF to rebound from the current price level.
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 Claimant Count Change
GBP Average Earnings Index
GBP Unemployment Rate
What can we expect from GBP today?
The GBPUSD bounced strongly from the 1.2040 price level overnight, to retest the 1.2160 price area. This move higher was primarily due to the weakness of the DXY. With the UK employment data to be released today, the GBPUSD could see increased volatility. However, it could be likely that the GBPUSD could consolidate further, in the lead-up to the US CPI data release. A weaker DXY could see the GBPUSD trade significantly higher toward the key resistance level of 1.2250. Alternatively, if the US CPI is released higher than expected, the GBPUSD could reverse strongly to the downside, to retest the 1.2040 support level.
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 Bullish
The Canadian Dollar (CAD)
Key news events today
No Major News Events
What can we expect from CAD today?
The USDCAD continues to trade lower as the price is dragged down by the weakening of the DXY. Overnight, the USDCAD saw choppy price action as it fluctuated along the 1.3345 price level. However, early today, the USDCAD trades at the 1.3330 price level with the price action signaling further downside potential. Significant weakness in the DXY could see the USDCAD trade down to the previous swing low of 1.3225.
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 Bullish
Oil
Key news events today
No Major News Events
What can we expect from Oil today?
Energy prices traded slightly lower following news that the US would release more crude from its Strategic Petroleum Reserve (SPR), possibly in reaction to the threat from Russia that it would cut production levels. Significantly choppy price action is expected for WTI and Brent. WTI is trading above the 79 price level and could see further upside to 82.00 if the DXY weakens following the CPI data release today. Similarly, Brent could trade higher from the current price level of 86, toward the near term resistance of 89.00.
Next 24 Hours Bias
Weak Bullish
