What happened across the Asia session?
Most major currencies traded slightly higher during the Asia session as the DXY weakened briefly.
What does it mean for Europe and US Sessions?
Look out for choppy price action with the US market on a bank holiday today.
The Dollar Index (DXY)
Key news events today
USD Bank Holiday
What can we expect from DXY today?
The DXY reached a high of 104.60 during the trading session on Friday before retracing lower strongly to end the trading week along the 103.80 price level. Volatility on the DXY is likely to be low today, with the US on a Bank Holiday. Therefore, look for the price to consolidate between the price range of 103.70 and 104 as the markets look toward the next signal from the US Federal Reserve. If the price breaks above the 104 price level, the DXY could climb to retest the 104.60 high again. Alternatively, the DXY could trade lower beyond 103.70 to reach the 103.50 price level.
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?
As the DXY retraced from the high of 104.60, Gold with an inverse relationship to the DXY rebounded strongly from 1820 to trade steadily higher toward the resistance level of 1844. While the price is likely to retrace briefly from the resistance level, to retest the 1835 price level, look for further upside on Gold if the price breaks above 1845, with the next key resistance level at 1865.
Next 24 Hours Bias
Weak Bullish
The Euro (EUR)
Key news events today
No major news events.
What can we expect from EUR today?
The EURUSD traded up to the round number price level of 1.07 on Friday after the price bounced from the 1.0625 interim support level. This move higher was due to the brief weakness of the DXY. Currently trading at the 1.0690 price level, look for the EURUSD to break above the 1.07 price level to signal further upside potential, with the next key resistance level at 1.0765.
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 Bullish
The Swiss Franc (CHF)
Key news events today
No major news events.
What can we expect from CHF today?
The USDCHF reversed strongly from the 0.9330 price level to offset the recent gains, ending the previous week at the 0.9245 price level. This directional bias of the USDCHF is still heavily dependent on the volatility of the DXY. Anticipating further weakness in the DXY, the USDCHF could trade significantly lower if the price breaks below the 0.9230 price level, with the next key support level at 0.9160.
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
No Major News Events
What can we expect from GBP today?
The GBPUSD currently trades along the 1.2040 price level with the price action indicating further upside potential if the interim resistance level of 1.2050 is breached. With no major news events ahead for the UK, further upside moves on the GBPUSD would require the DXY to weaken further. If the GBPUSD trades higher, the price could climb to retest the resistance level of 1.2175.
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
CAD Bank Holiday
What can we expect from CAD today?
The USDCAD is currently consolidating along the 1.3470 price level following the strong retracement lower on Friday. If the DXY continues to weaken, this could lead the USDCAD to trade lower toward the key support and round number level of 1.34. However, with the Canadian and US bank holiday today, volatility is likely to be lower and price action choppy.
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 lower on Friday with WTI reaching 75.30, while Brent slid down to reach the 80.00 price level. However, as the DXY weakened, WTI and Brent retraced higher and if the DXY continues to weaken, further upside on energy could be anticipated. Look for WTI to climb toward the 78.00 price level and Brent to reach retest the 85.00 round number level.
Next 24 Hours Bias
Weak Bullish
