What happened across the Asia session?
Most major currencies consolidated during the Asia session as the DXY retraced briefly.
What does it mean for Europe and US Sessions?
Look out for a recovery in DXY strength but be aware of choppy price action with the DXY attempting to break the key resistance level.
The Dollar Index (DXY)
Key news events today
USD Core PPI m/m
USD PPI m/m
What can we expect from DXY today?
The US retail sales data was released at 3% (Forecast: 1.9%) overnight, surprising markets with a significantly better-than-expected result. This caused the DXY to spike to the upside, testing the 104-round number resistance level. However, the move higher was unsustained as the DXY failed to break through the resistance and retraced. Currently trading at the 103.55 price level, the DXY could continue to retrace lower to test the 103-round number support level before trading higher again.
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 Bearish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
While Gold traded lower earlier in the trading session yesterday, the price consolidated along a tight price range along the 1833 price level. With the current retracement of the DXY, Gold has retraced to the upside and is currently trading at the 1841 price level. While further retracement to the upside can be expected, with 1850 a target level, look for the price action to indicate a reversal and a continuation of the downtrend. If the price rejects the 1850 price level, Gold could slide further, with the immediate support level at 1833 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?
The EURUSD traded significantly lower yesterday with the price sliding down to the key support level of 1.0660. However, following comments from ECB President Lagarde that she intends to raise rates by 50bps, the EURUSD rebounded from the support level to test the 1.07 price level. Look for further downside on the EURUSD as the DXY recovers in strength, with the price likely to retest the 1.0660 key support level again.
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?
Overnight, the USDCHF fluctuated between the 0.92 and 0.9260 price levels with no clear directional bias. As the DXY retraces, look for the USDCHF to trade lower toward the 0.92 round number support level. If the price fails to break below the support, the USDCHF could trade higher toward the immediate resistance level at 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
No Major News Events
What can we expect from GBP today?
The UK CPI was released yesterday at 10.1% (Forecast: 10.3% Previous 10.5%), which signaled that inflation was growing at a slower rate. This could relieve the pressures on the Bank of England (BoE) to continue increasing interest rates further, thus leading to the GBPUSD trading significantly lower through the trading session yesterday. The price broke the 1.2150 price level to reach the round number support of 1.20. While the price has retraced higher to retest the 1.2050 price area, look for the completion of the retracement and for the GBPUSD to continue with the downtrend, with the next key support level at 1.1860
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 climbed steadily to the upside through the trading session yesterday but failed to break above the 1.3440 price level. With the price retracing to the downside as it is dragged lower by the DXY, the USDCAD could consolidate along the current price level of 1.3380 before trading higher again. Look for the USDCAD to trade higher toward the key resistance level of 1.3480 with a recovery in strength on the DXY and the price action signaling a rejection of the downside.
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?
WTI and Brent traded with no clear directional bias overnight as a series of mixed news headlines were released. While larger than expected crude oil inventories led energy prices to trade lower, the expectations of increased demand in 2023 and weakness in the DXY saw the move lower being offset. In the short term, WTI is likely to continue trading within the price range of 77.50 and 80.50 and similarly, Brent could fluctuate between the 84 and 87 price levels.
Next 24 Hours Bias
Weak Bullish
