IC Markets Asia Fundamental Forecast | 03 October 2022

IC Markets No Comments

 

What happened in the US session?

As markets closed the month on Friday, the S&P closed lower by 1.5% while the DXY consolidated with a lack of significant news. 

What does it mean for the Asia Session?

Look for the DXY to continue consolidating at the current level with most major currencies likely to retrace higher against the DXY briefly. 

The Dollar Index (DXY)

Key news events today

USD ISM Manufacturing PMI 

What can we expect from DXY today?

The DXY consolidated between the 111.71 and 112.50 price levels through Friday’s trading session. Currently trading at the 112-round number support level, the DXY could continue to fluctuate within the previous price range with no clear directional bias. If the price breaks below the 111.50 price level the DXY could see a significant move to the downside towards the 111.00 round number support level. Alternatively, the DXY could bounce off the 112 support level to test the near-term resistance of 113.

Central Bank Notes:

  • Federal Reserve hikes rates by 75bps taking interest rates to 3.25%
  • Next meeting on 3 November 
  • Further rate increases can be anticipated, with rate cuts expected only if Fed Reserve is confident inflation is moving back down to 2%

 

Next 24 Hours Bias

Weak Bearish 

Gold (XAU)

Key news events today

No major news events. 

What can we expect from Gold today?

Gold maintained the upside as it fluctuate between the 1665 price level. Look for Gold to continue consolidating at this level with downside potential if the DXY recovers in strength. Look for price action at the 1655 support level or the 1680 resistance level to signal a directional bias. 

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?

The AUDUSD traded lower over the trading session on Friday as the price fell towards the 0.6370 support level. Early in the trading session today, the AUDUSD had a brief bounce to test the 0.6450 interim resistance level. Look for a clear rejection of the resistance level to signal further downside towards the 0.6370 support level. 

 

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 bounced from the 0.5590 support level early in the trading session today. However, the move higher is likely to be unsustained with price reversing following the move up. Look for the NZDUSD to trade lower to test the near term support of 0.5570.

Central Bank Notes:

  • Cash rate stands at 3.00% 
  • Central bank is likely to continue with the current path of rate adjustment
  • Next meeting on 5 October 2022

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?

Early in the trading session today, the USDJPY pair made a small bullish move toward the key 145 level. Last Friday, the amount spent by Japan’s government intervening in the foreign exchange market was revealed to be 2.84 trillion Yen (19 billion USD). Despite the fact that there are no major news events affecting the JPY today, traders should exercise caution. The USDJPY is likely to remain below the 145 resistance level, but if the price breaks above, the 146 resistance level could be a possible target. 

 

Next 24 Hours Bias

Weak Bearish