What happened across the Asia session?
Most major currencies traded in consolidation during the Asia session as the DXY consolidated along the 101.30 price level.
What does it mean for Europe and US Sessions?
Anticipate increased volatility across the major currency pairs with the release of the US advance GDP due today.
The Dollar Index (DXY)
Key news events today
USD Advance GDP q/q
What can we expect from DXY today?
The DXY traded with significantly choppy price action as the price fluctuated between the 101.30 and 101.80 price range overnight. However, as the market took on a more hawkish view of the Euro, this led to the DXY losing ground against the other major currencies. Currently trading along the 101.40 price level, the DXY could consolidate along the current price with a brief retracement to the upside. Look for the DXY to restest the 101.60 price level before possibly trading lower again.
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?
Gold traded significantly higher overnight as the price bounced off the support level of 1921, climbing steadily to a high of 1948. With the price currently at the 1945 price level, a brief retracement to the downside can be expected. However, look for further upside upon completion of the retracement. If Gold trades above the 1948 price level, the price could continue trading higher toward the round number level of 1950 and the next key resistance level of 2000.
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 has continued to climb steadily to the upside overnight. This move higher is due to increasing comments from the ECB members that further rate hikes of 50bps can be expected for the next 2 meetings. Currently trading at the 1.0920 price level, look for a potential breakout to the upside on the EURUSD, with the interim resistance at 1.0930 and the next key resistance level at 1.1080.
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 to slide lower, reaching a near-term low and within the price area of 0.9170. The overall directional bias of the USDCHF continues to be dictated by the volatility of the DXY. Currently consolidating at the 0.9170 price level, look for the USDCHF to break lower toward the interim support level of 0.9150.
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?
As the DXY weakened overnight, the GBPUSD climbed steadily to the upside from the 1.23 support level. As the price trades along the 1.24 price level currently, a continuation of the current uptrend is anticipated. Look for the GBPUSD to break above the 1.24 round number resistance level strongly to signal further upside, with the next key resistance level at 1.25.
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 Bank of Canada (BoC) released its interest rate decision with a 25bps rate hike. However, the USDCAD bounced from the 1.3350 price level following the release of the news, as the BoC indicated that it was time to pause on further rate hikes, citing that the current monetary policy is sufficiently restrictive. The USDCAD tested a high of 1.3430 before retracing to consolidate just below the 1.34 round number level. If the DXY recovers in strength, the USDCAD could trade higher beyond the 1.34 price level, with the next key resistance level at 1.35.
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 Bearish
Oil
Key news events today
No Major News Events
What can we expect from Oil today?
Energy prices consolidated overnight with WTI fluctuating between 80.00 and 81.00 while Brent traded along the 86.00 price level. With no major news events on the horizon, look for a potential breakout to the downside and a resumption of the downtrend. If WTI breaks below the current price level, the price could trade lower, down to the 78.00 price area. Brent could also trade lower toward the 84.00 price level if the immediate support level was broken.
Next 24 Hours Bias
Weak Bearish
