What happened across the Asia session?
Most major currencies traded slightly lower against the US dollar as the DXY experienced a brief strengthening during the Asia session.
What does it mean for Europe and US Sessions?
Look out for higher volatility in price as the US market resumes following a bank holiday.
The Dollar Index (DXY)
Key news events today
USD Flash Services PMI
USD Flash Manufacturing PMI
What can we expect from DXY today?
The DXY remained below the 104 price level overnight. However, as the price rejects the 103.70 price level, look for a potential breakout to the upside with market volatility expected to return. With the services and manufacturing PMI data expected to indicate a slight increase, look for the DXY to break above the 104 price level to signal further upside potential, with the near term high of 104.60 a potential target 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 Bullish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
Overnight, Gold fluctuate along the 1845 price level with no directional bias as the market consolidated. While the price remains below the 1850 price level, a rejection of the resistance could lead to a resumption of the downside for Gold, down toward the support level of 1820. Alternatively, if the price breaks out above 1850, Gold could continue with the correction to the upside, with the next immediate resistance at 1870.
Next 24 Hours Bias
Weak Bullish
The Euro (EUR)
Key news events today
EUR Flash Manufacturing PMI
EUR Flash Services PMI
What can we expect from EUR today?
The EURUSD traded slightly lower from the 1.0685 price level early in the trading session today. If the DXY continues to strengthen, the EURUSD could see significant downside, especially if the price breaks below 1.0650, with the immediate support level at 1.06. However, with a series of economic data to be released for the Eurozone today, volatility on the EURUSD could be higher. On the other hand, if the EURUSD breaks above the 1.07 round number level strongly, the price could climb higher toward the key resistance level of 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 Bearish
The Swiss Franc (CHF)
Key news events today
No major news events.
What can we expect from CHF today?
The USDCHF traded within a range of 25 pips during the US session overnight, along the 0.9230 price level. A recovery in strength on the DXY would see the USDCHF trade higher, however, the price would have to break above the previous daily high of 0.9255 to signal further upside potential. If the price climbs higher, the USDCHF could retest the 0.93 round number price level.
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 Flash Manufacturing PMI
GBP Flash Services PMI
What can we expect from GBP today?
Overnight, the GBPUSD consolidated in a narrow range along the 1.2035 price level, with no clear directional bias. Although the manufacturing and services PMI for the UK today is expected to show an improvement from the previous. This could bring some strength to the GBPUSD. The current price action indicates the possibility for a breakout to the downside. Anticipate higher volatility on the GBPUSD, and if the price trades below 1.20, the next key support level is at 1.1880.
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
CAD Median CPI y/y
CAD Trimmed CPI y/y
CAD CPI m/m
What can we expect from CAD today?
The USDCAD traded slightly lower overnight, with the price reaching the near term support of 1.3440. Early in the trading session today, the USDCAD bounced from the support level to reach 1.3475 as the DXY recovered in strength. The USDCAD could continue to trade higher toward the key resistance level of 1.3540, with the Canadian CPI due to be released today. Median CPI y/y is forecasted at 4.9% (Previous: 5.0%) which could alleviate the pressures on the Bank of Canada to increase interest rates further.
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?
Overnight, WTI traded up to the 77.50 price level before reversing lower. Similarly, Brent climbed higher but reversed from the 84.50 price area. Anticipating a brief recovery in the DXY, energy prices could trade slightly lower but is likely to fluctuate within a wide range. Look for WTI and Brent to reach their support levels of 75.50 and 82.00 respectively.
Next 24 Hours Bias
Weak Bearish
