What happened across the Asia session?
The major currencies traded slightly lower against the DXY during the Asia session.
What does it mean for Europe and US Sessions?
Look for further DXY strength and increased volatility across the major currencies pairs.
The Dollar Index (DXY)
Key news events today
No major news events.
What can we expect from DXY today?
On Friday, the DXY spiked up toward the 102 price level but the move higher was quickly reversed with the DXY continuing to trade along the 101.70 price range. The short-term volatility for the DXY on Friday was due to the release of the Core PCE price index at 0.3% as expected. The DXY is unlikely to develop a strong directional bias in the interim, with the US Federal Reserve meeting due later in the week. However, if the DXY breaks above the 102-round number resistance level, further upside could be anticipated, with the next key resistance level at 102.50.
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 Bullish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
As Gold reversed from the 1945 price area to trade significantly lower toward the end of the trading session last week, the price consolidated below the 1930 price level on Friday with choppy price action. Look for further downside potential on Gold, if the price breaks below the 1920 price level, indicating a continuation of the move lower. This move lower would be dependent on further strength to develop for the DXY. The next key support level for Gold is at the 1900 price level.
Next 24 Hours Bias
Weak Bearish
The Euro (EUR)
Key news events today
No Major News Events
What can we expect from EUR today?
The EURUSD continues to trade lower as the downward pressure persists, amid the DXY strength. As the EURUSD fails to break above the 1.0875 price level, the downtrend is likely to continue. Look for the EURUSD to break below the 1.0840 price level to signal a confirmation of the downside potential, with the next key support level at 1.0780.
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 Bearish
The Swiss Franc (CHF)
Key news events today
No Major News Events
What can we expect from CHF today?
The USDCHF is currently consolidating along the 0.9215 price level with no clear directional bias. As the USDCHF trades with choppy price action, look for the potential of a breakout towards the upside, if the DXY strength recovers further, with the next key resistance level at 0.9280. Alternatively, if the USDCHF breaks below the 0.920 price level, the USDCHF could trade lower toward the key support level of 0.9165
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 1.2355 price level to retest the 1.24 round number resistance level on Friday. Currently trading just under the 1.24 price level and with no major news events for the UK, the price volatility is likely to be dependent on the DXY. Look for further strength in the DXY to lead the GBPUSD to trade lower, reversing from the 1.24 resistance level. If the price breaks below the 1.2350 price level, further moves to the downside can be anticipated, with the key support level at 1.2270.
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 Bearish
The Canadian Dollar (CAD)
Key news events today
No Major News Events
What can we expect from CAD today?
The USDCAD consolidated between the 1.33 and 1.3345 price range through the trading session on Friday. Look for the USDCAD to rebound from the 1.33 price level to form a strong base, for further upside potential. If the price breaks above the 1.3350 price level, the USDCAD could climb to the next key resistance level of 1.3420. However, this move higher would be highly dependent on the strengthening of the DXY.
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?
Energy prices traded lower through the session on Friday as global recessionary concerns offset expectations for higher demand arising from China. WTI reversed strongly from the 82.50 price area to trade down toward the key support level of 80.00. With the current price action, look for further downside if the current price rejects the 79.50 price level, with the next key support level at 78.00. Similarly, Brent traded lower down to the 86.00 price level. However, the price is likely to consolidate along the current price level for the interim. If the price breaks below the 85.50 price level, Brent could trade significantly lower, down to the next support level at 83.50.
Next 24 Hours Bias
Weak Bearish
