What happened across the Asia session?
Most currencies traded higher against the DXY during the Asia session as the DXY traded lower early in the trading session.
What does it mean for Europe and US Sessions?
While volatility could be higher during the Europe and US session, look for volatility to slow down as the market heads into the weekend.
The Dollar Index (DXY)
Key news events today
No major news events.
What can we expect from DXY today?
Early in the trading session today, the DXY reversed strongly from the support and turned resistance and the price level of 102. The DXY has continued to weaken as a result of the stronger-than-anticipated UoM Consumer Sentiment on Friday which was released at 64.6 (Forecast: 60.8). This data indicated a resilient US economy which again signals the potential for a slowdown in the scale of future interest rate hikes. Currently trading at the 101.50 price area, look for further downside with the next key support level at the 101 round number support level and previous swing low from May 2022.
Central Bank Notes:
- Federal Reserve hiked rates by 50bps taking interest rates to 4.50%
- Next meeting is on 2 February 2023
- Further rate increases are expected to slow
Next 24 Hours Bias
Weak Bearish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
As the DXY continued to weaken, Gold climbed steadily to the upside, breaking strongly above the round number resistance level of 1900. Currently trading at the 1925 price level, further moves to the upside can be anticipated, especially if the DXY continues to weaken. The next key resistance level at 1955 is a potential target level.
Next 24 Hours Bias
Weak Bullish
The Euro (EUR)
Key news events today
No Major News Events
What can we expect from EUR today?
Through the trading session on Friday, the EURUSD fluctuated between the 1.08 and 1.0880 price range. However, as the price failed to break above the 1.09 resistance area, immediate moves to the upside could be delayed. Look for the EURUSD to test the near-term support and round number level of 1.08 again. Price action at the round number support level should indicate the next directional bias of the EURUSD. If the EURUSD bounces off the 1.08 support level, the EURUSD could resume the uptrend to test the 1.09 and 1.0950 resistance levels.
Central Bank Notes:
- Main Refinancing Rate is currently at 2.50%
- Significant and consistent rate hikes expected from the ECB
- Next meeting on 2 February 2023
Next 24 Hours Bias
Weak Bullish
The Swiss Franc (CHF)
Key news events today
No Major News Events
What can we expect from CHF today?
The USDCHF continued its retracement to the downside after testing the 0.9365 resistance level, with the price currently at 0.9240. As the price bounces off the 0.9220 level, look for the USDCHF to retest the near term resistance level of 0.9280 before trading lower again, especially if the DXY continues to weaken. If the USDCHF breaks below the 0.9220 price level, look for the USDCHF to continue trading lower toward the key support level of 0.9180.
Central Bank Notes:
- Current policy rate is at 1.00%
- Next meeting on 23 March 2023
Next 24 Hours Bias
Weak Bullish
The Pound (GBP)
Key news events today
GBP BoE Gov Bailey Speaks
What can we expect from GBP today?
Recent GDP m/m data from the UK was released at 0.1% (Forecast: -0.2%) which was better than expected. The GBPUSD climbed steadily to the upside, bouncing off the 1.22 price level to trade toward the 1.23 round number resistance area. Currently, the GBPUSD is retracing and is expected to test the near term support level of 1.2220. If the price breaks below the 1.22 round number level, the GBPUSD could correct lower to the 1.2150 support level. However, if the price fails to break lower, the GBPUSD could reverse to trade higher toward the next key resistance level of 1.24.
Central Bank Notes:
- Interest rate is currently at 3.50%
- Peak inflation revised to more than 15% in 2023.
- Next meeting on 2 February 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 traded with significant volatility on Friday as the price fluctuated between the price range of 1.3330 and 1.3430. The USDCAD ended the trading week below the 1.34 round number level and the current weakness in the DXY has brought the USDCAD lower to the 1.3370 price level. Look for the USDCAD to retrace higher to retest the 1.34 round number level again before potentially trading lower, with the key support level at 1.33.
Central Bank Notes:
- Increased interest rates to 3.75%
- Surprised markets with only 50bps hike in October
- Future hikes determined by future inflation data and expectations
- Next meeting on 25 January 2022
Next 24 Hours Bias
Weak Bullish
Oil
Key news events today
No Major News Events
What can we expect from Oil today?
Energy prices climbed higher on expectations that demand from China will rise to a record high. WTI traded to the round number resistance of 80.00, with the current price action indicating a brief retracement before further a resumption of the upside toward the next key resistance of 81.45. Brent traded up to the 85.50 price area before reversing and is likely to test the key support level of 83.00 before trading higher to the key resistance level of 87.00.
Next 24 Hours Bias
Weak Bullish
