What happened in the US session?
The DXY strengthened significantly on Friday, leading to most major currencies losing ground against the US Dollar. The S&P close lower by 1.05% at the 3970 price level.
What does it mean for the Asia Session?
Look for the major currencies to consolidate during the Asia session before continuing with the previous trend.
The Dollar Index (DXY)
Key news events today
No major news events.
What can we expect from DXY today?
On Friday, the Core PCE price index was released at 0.6% (Forecast: 0.4%). This signaled that inflation growth in the US was higher than expected which is likely to spur further interest rate increases from the US Federal Reserve. Following the news release, the DXY climbed steadily from the 104.65 price level up toward the 105.30 price area. Currently consolidating at the 105 price level, look for the price to retrace briefly before trading higher toward the near term resistance of 105.50.
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?
Gold traded down to the support level of 1810 on Friday as the DXY strengthened. Although the price retraced slightly to retest the 1815 price area, look for further downside on Gold, especially if the price breaks below the 1810 price level, with the next key support level at the round number price level of 1800.
Next 24 Hours Bias
Medium Bearish
The Australian Dollar (AUD)
Key news events today
No major news events.
What can we expect from AUD today?
The AUDUSD saw a significant slide as the price broke the 0.68 round number level to reach the 0.6725 price level. The AUDUSD could continue trading lower, driven down to the 0.60 support level due to further strength in the DXY. However, as the RBA is expected to continue increasing rates, look for a strong retracement to the upside, testing the 0.6760 price level, before a continuation of the downtrend.
Central Bank Notes:
- Cash rate stands at 3.35%
- Future rate rises are expected as RBA targets the 2-3% inflation target.
- Next meeting on 7 March 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?
Similar to the AUDUSD, the NZDUSD traded significantly lower on Friday, testing the 0.6150 price level. With no major news today, prices are currently consolidating along the 0.6160 price level. Look for a brief retracement to the upside before trading lower again. If the NZDUSD breaks below 0.6150, this would signal a further confirmation of the downtrend, with the next key support level at 0.6075.
Central Bank Notes:
- Cash rate stands at 4.75%
- Central bank is likely to continue with the current path of rate adjustment
- Next meeting is on 5 April 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 climbed steadily to the upside, reaching a high of 136.60 as the DXY strengthened significantly on Friday. As the USDJPY retraces from the high, look for the price to retest the 136 and 135.50 price range before trading higher again. If the USDJPY breaks strongly above 136.60, the USDJPY could continue trading higher toward the next key resistance level of 138.50.
Central Bank Notes:
- Cash rate stands at -0.1%
- Expanded range for 10 year JGB yield fluctuations to 0.5%
- Next meeting is on 8 March 2023
Next 24 Hours Bias
Weak Bearish
