What happened across the Asia session?
Most major currencies traded lower against the US dollar during the Asia trading session.
What does it mean for Europe and US Sessions?
Look out for a continuation of DXY strength and increased price volatility with the release of the US Retail Sales data due today.
The Dollar Index (DXY)
Key news events today
USD Retail Sales m/m
USD Core Retail Sales m/m
What can we expect from DXY today?
Overnight, the US CPI surprised markets as it was released at 6.4%, slightly higher than the forecast of 6.2%. The data spurred significant volatility in the DXY as the price spiked up to the 103.20 price level before replacing sharply to retest the 102.45 price area. However, as the inflation did not fall as much as expected, the expectation for further rate increases from the Feds has increased. The DXY, currently trading at 103.23, is anticipated to continue climbing to the upside, with the next key resistance level at 103.80. Look out for the US retail sales data to be released today (Forecast: 1.9% Previous: -1.1%) could provide additional upside potential for the DXY.
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 Bullish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
As markets anticipate further strengthening of the DXY, the price action on Gold signaled further downside potential. Trading lower overnight from the 1870 price level, Gold is currently at the key support level of 1850. If the price breaks below 1850, Gold could slide further, with the immediate support level at 1845 and 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?
Overnight, the EURUSD spike up to test the 1.08 round number resistance area before trading significantly lower. However, the price remains supported by the 1.07 price area. Currently trading at the 1.0722 price level, look for the EURUSD to break below the support level to signal further downside potential. If the DXY continues to strengthen, look for the EURUSD to trade down to the next key support level of 1.0655.
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 spiked down to test the 0.9145 price level but as the DXY strengthen, this led the USDCHF to reject the move to the downside to trade significantly higher. The USDCHF currently trades at the 0.9235 price level with the price action signaling further upside potential, especially if the DXY continues to strengthen. Look for the price to trade higher toward the immediate resistance level of 0.9290.
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 CPI y/y
What can we expect from GBP today?
The GBPUSD currently trades at the 1.2145 price level following the volatility overnight which saw the GBPUSD trade higher due to better-than-expected employment data released for the UK. Anticipating continual strength in the DXY, the GBPUSD could continue trading lower down to the 1.20 round number support level. However, the UK CPI y/y (Forecast: 10.3% Previous: 10.5%) is due to be released today and could bring increased volatility to the GBPUSD if the CPI is released higher than forecasted.
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?
Despite the volatility in the DXY overnight, the USDCAD fluctuated strongly along the 1.3345 price level with no strong directional bias. Anticipating further strength in the DXY, look for the USDCAD to trade higher from the current price level of 1.3360. If the USDCAD breaks above the recent high of 13380, the price could climb higher toward the next key resistance level of 1.3480.
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 traded significantly lower as the DXY climbed higher overnight. Further weakness in price is expected given the market anticipation that the Federal Reserve could continue to increase interest rates, thus strengthening the DXY. Look for WTI to break below the 78.00 price level to signal further downside, with the next key support level at 76.50. Similarly, Brent is approaching the 84.50 support level, after falling from the high of 86.90. If the price breaks below the support level, Brent could trade lower to the next key support level of 83.00.
Next 24 Hours Bias
Weak Bearish
