What happened in the US session?
The US dollar traded with lower volatility during the US session, while the S&P closed slightly lower by -0.6% at the 4,111 price level.
What does it mean for the Asia Session?
Look for the major currencies to consolidate during the Asia session, with volatility on the AUDUSD derived from the release of the RBA interest rate decision.
The Dollar Index (DXY)
Key news events today
No major news events.
What can we expect from DXY today?
The DXY climbed slightly higher overnight, reaching the 103.70 price area before consolidating. With no major news events ahead for the US, the DXY is likely to retrace lower testing the 103-round number price level while maintaining the current bullish sentiment. Look for the price to complete the retracement before trading higher again, with the next key resistance level at 105.
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 climbed slightly overnight, Gold consolidated in a narrow price range between the 1860 and 1880 levels. Anticipating a brief retracement on the DXY, Gold could trade slightly higher before trading lower again. If Gold fails to break above the 1890 price level, the downtrend is likely to continue. Confirmation of the downside would be signaled if Gold breaks below the 1860 price level, with the next key support level at 1800.
Next 24 Hours Bias
Weak Bearish
The Australian Dollar (AUD)
Key news events today
AUD Cash Rate
AUD RBA Rate Statement
What can we expect from AUD today?
The RBA hiked rates by 25bps today, taking interest rates in Australia to 3.35%. In the accompanying rate statement, the RBA indicated that further interest rate hikes can be expected, signaling that the current period of high inflation is only temporary. The AUDUSD spiked up to the 0.6950 price level on the release of the interest rate decision. If the price retraces lower beyond the 0.69 round number support, more significant moves to the downside can be expected. However, the AUDUSD could trade briefly higher to test the 0.70 resistance level before trading lower again.
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 Bullish
The Kiwi Dollar (NZD)
Key news events today
No major news events.
What can we expect from NZD today?
The NZDUSD continues to consolidate between the price range of 0.6280 and 0.6330 with no clear directional bias. While some upside could be anticipated, as the AUDUSD trades higher, look for the NZDUSD to complete the retracement to the upside before trading lower again. If the price action on the NZDUSD indicates a rejection of the upside, look for the NZDUSD to break below the 0.6280 price level to signal further downside with the next key support area at the round number price level of 0.62.
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 consolidates along the 132.50 price level overnight with no clear directional bias. However, as the USDJPY fails to retrace lower significantly. Look for a breakout potential to the upside if the price trades beyond the 133 price level. Moves to the upside for the USDJPY could see the price trade significantly higher toward the next key resistance level at the 134-round number level.
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
