What happened in the US session?
The DXY traded with little volatility as the US market was closed for a bank holiday.
What does it mean for the Asia Session?
Look for a potential retracement on the major currencies as the DXY is anticipated to continue its climb higher.
The Dollar Index (DXY)
Key news events today
No major news events.
What can we expect from DXY today?
Although the DXY traded lower early in the trading session yesterday, the price rebound strongly, to trade higher toward the near-term resistance level of 102.45. The DXY traded with lower volatility overnight as the US market was closed for a bank holiday. With no major news events for the US today, look for the DXY to trade higher if the price breaks above the resistance level, with the next key resistance area at the round number level of 103.00.
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?
Gold reversed from the 1928 high as the DXY strengthened from the key support level. Price reversed down toward the 1911 price level, with the current price action indicating the potential for further downside. If the DXY continues to strengthen, this could have an inverse impact on Gold. Look for the price to break below the 1900 price level to indicate a reversal, with the next key support level at 1895.
Next 24 Hours Bias
Weak Bearish
The Australian Dollar (AUD)
Key news events today
No major news events.
What can we expect from AUD today?
Following the early move on the AUDUSD up toward the 0.7020 price level, the AUDUSD retraced strongly back down toward the 0.6940 price level. The AUDUSD ended the overnight session consolidating at the 0.6950 price level. While a continuation of the uptrend is anticipated, the upside could be limited by the resistance level and previous swing high at the 0.7020 price level. Alternatively, look for the AUDUSD to break below the 0.6930 price level to signal a potential reversal to the downside, with the next key support level at 0.6860.
Central Bank Notes:
- Cash rate stands at 3.10%
- Future rate rises will be determined by data, the outlook for inflation, and the labour market.
- Next meeting on 7 February 2023
Next 24 Hours Bias
Weak Bearish
The Kiwi Dollar (NZD)
Key news events today
No major news events.
What can we expect from NZD today?
The NZDUSD traded with choppy price action as the price fluctuated between the price range of 0.6366 and 0.6426. With no major news events on the horizon for the NZDUSD, the directional bias is likely to follow the current trend and the DXY. Look for a potential reversal on the NZDUSD if the price breaks below the interim support level of 0.6350, with the next key support level at 0.63.
Central Bank Notes:
- Cash rate stands at 4.25%
- Central bank is likely to continue with the current path of rate adjustment
- Next meeting is on 21 February 2023
Next 24 Hours Bias
Weak Bearish
The Japanese Yen (JPY)
Key news events today
No major news events.
What can we expect from JPY today?
The USDJPY traded higher overnight as the DXY strengthened briefly. Bouncing off the 127.35 price level, the USDJPY climbed to test the price area of 129. Look for the price to consolidate briefly at this level, with a slight retracement before trading higher again, if the DXY continues to strengthen. Alternatively, the USDJPY could resume with the downtrend, reversing from the 129 price area, down to the support level of 127.35 again.
Central Bank Notes:
- Cash rate stands at -0.1%
- Expands range for 10 year JGB yield fluctuations to 0.5%, rather than the current of 0.25%
- Next meeting is on 18 January 2023
Next 24 Hours Bias
Weak Bullish
