What happened across the Asia session?
The Japanese Yen weakened significantly following the release of the BoJ monetary policy statement which did not mention an adjustment to the current monetary policy.
What does it mean for Europe and US Sessions?
Look for increased volatility in the DXY with the retail sales and PPI data to be released.
The Dollar Index (DXY)
Key news events today
USD Core PPI m/m
USD Core Retail Sales m/m
USD PPI m/m
USD Retail Sales m/m
What can we expect from DXY today?
Earlier in the trading session yesterday, the DXY broke below the 102 round number support level to trade significantly lower, down to the 101.70 price area. However, the move to the downside was sharply reversed during the US session with the price trading back toward the 102.00 price level. Data for the US Core Retail Sales (Forecast: -0.5% Previous: -0.2%) and Retail Sales (Forecast: -0.8% Previous: -0.6%) is due to be released today and is anticipated to be weaker than previous. This could lead to further weakness in the DXY, with the price likely to reverse strongly from the 102 price area, down to the price area of 101.55, which is also the key support level.
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 Gold reversed from the 1928 resistance level, the price consolidated along the 1910 price level despite the strength of the DXY. If the DXY continues to weaken, Gold could break out of the current consolidation to trade higher, continuing with the current uptrend. However, look for Gold to break above the 1915 price level to signal upside potential, with the next key resistance level at the 1928 level.
Next 24 Hours Bias
Weak Bullish
The Euro (EUR)
Key news events today
EUR Final CPI y/y
What can we expect from EUR today?
The EURUSD traded lower overnight as the DXY strengthened, reaching a low of 1.0780. Earlier today, the EURUSD continued its slide downward, to test the 1.0770 price level before retracing sharply. Currently trading just below the 1.08 price level, a resumption of the uptrend can be expected. If the EUR CPI y/y is released at 9.2% as expected, look for the EURUSD to break above the 1.08 price level and trade higher toward the near term resistance area of 1.0880.
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 trading along the 0.92 round number support level overnight, despite the recovery in strength of the DXY. However, with the DXY expected to weaken again, look for further downside on the USDCHF if the price breaks strongly below the 0.92 round number and key support level. The next key support level beyond 0.92 is at 0.9060.
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 CPI y/y
What can we expect from GBP today?
The GBPUSD CPI y/y was released as expected at 10.5% (Forecast: 10.5% Previous 10.7%) which led to the GBPUSD trading higher above the 1.23 round number price level. Anticipating further weakness in the DXY, the GBPUSD is likely to continue trading higher toward the next key resistance level of 1.2450.
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?
Overnight, the median CPI y/y was released at 5.0% (Forecast: 4.9%) which indicated a continual growth in inflation for the Canadian economy. The continual growth in inflation is likely to lead to the BoC to continue hiking interest rates into the future. With the price currently trading lower to the 1.3350 price level, further downside is expected, with the next key support at the round number price level of 1.33.
Central Bank Notes:
- Increased interest rates to 3.75%
- Surprised markets with only 50 bps 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 traded higher amid choppy price action overnight, with the WTI testing the round number resistance level of 80. Look for the price to retrace briefly before trading higher again, weith the next key resistance level at 83.00. Similarly, Brent traded higher to the 87.00 price level, with further upside expected, toward the next key resistance level of 88.00.
Next 24 Hours Bias
Weak Bullish
