What happened across the Asia session?
Most major currencies consolidated through the Asia session with early price action indicating lower against the DXY during the Asia session.
What does it mean for Europe and US Sessions?
Look out for a recovery in strength on the DXY which would lead the major currencies to trade significantly lower.
The Dollar Index (DXY)
Key news events today
USD CB Consumer Confidence
What can we expect from DXY today?
Overnight, the DXY retraced from the high of 105.30 to trade down to the 104.60 price level. This move lower was partially due to a significantly lower than expected durable goods orders at -4.5% (Forecast: -3.7%). Look for the DXY to rebound from the current price level to trade higher, and to retest the 105.30 resistance level again. Look for the consumer confidence data release (Forecast: 108.5 Previous: 107.1) to possibly spur the DXY to resume the uptrend.
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?
As the DXY retraced lower overnight, Gold rebounded from the 1808 price level to reach the 1821 price level. As Gold currently consolidates along the 1817 price level, look for a potential breakout to the upside to retest the 1828 resistance level. However, if the DXY recovers in strength, look for Gold to reverse and trade lower, with the key support level at the round number price of 1800.
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 bounced off the 1.0540 price level to trade signficiantly higher, rising by close to 80 pips to test the 1.0620 price level. This move higher was due to the retracement on the DXY. Early in the trading session today, the EURUSD retraced from the high to trade down to the 1.0590 price level. Look for the EURUSD to break below the 1.0580 to signal further downside potential, especially if the DXY recovers in strength. If the EURUSD trades lower, the price could slide to retest the 1.0540 support level.
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?
Overnight, the USDCHF reversed strongly from the high of 0.9420 to reach the 0.9350 interim support level. With no major news events for the CHF on the horizon, the USDCHF is likely to continue consolidating at the current price level. A breakout to the upside would be driven due to a recovery in strength in the DXY. Look for the price to retest the recent high of 0.9420 and if the price breaks above the resistance, the next key resistance is at 0.9580.
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
No major news events.
What can we expect from GBP today?
The GBPUSD bounced off the 1.1935 price level to trade significantly higher to reach the 1.2060 price level. This move higher was due to the speculation that a deal regarding the Northern Ireland border (arising from Brexit) is close to being reached. If the speculation is confirmed, the GBPUSD could trade significantly higher, to retest the near-term resistance level of 1.2220. However, without any news releases and a recovery of strength on the DXY, the GBPUSD could trade down to retest the 1.19 round number support level again.
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 GDP m/m
What can we expect from CAD today?
As the DXY retraced overnight, the USDCAD too continued to trade lower after testing the recent high of 1.3670. However, the USDCAD slid only to retest the 1.3560 support level. Currently consolidating along the 1.3575 price level, the USDCAD is likely to remain along the current price range for the short term, with a break-out potential if the DXY recovers in strength. With the Canadian GDP due to be released today, and likely to signal a worse than previous data, the USDCAD could trade higher to retest the recent high of 1.3670 again.
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?
Through the trading session yesterday, energy prices traded in a relative consolidation with no clear directional bias. WTI fluctuated between 76.00 and 77.00 with the current price action indicating the potential for a move lower to test the near term support of 74.00. Brent traded within the 82.00 and 83.00 price level as recent US economic data signals further likelihood of interest rates increases and the possibility of an unavoidable recession. Look for Brent to trade lower, down to the 79.00 support level.
Next 24 Hours Bias
Weak Bearish
