IC Markets Asia Fundamental Forecast | 08 December 2022

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What happened in the US session?

The DXY weakened briefly overnight, with significant volatility arising following the news from Russia, threatening the use of nuclear weapons. The S&P 500 again closed slightly at the 3933 price level.

What does it mean for the Asia Session?

Expect higher volatility across the major currency pairs likely to continue with the overnight trend. 

The Dollar Index (DXY) 

Key news events today

No major news events. 

What can we expect from DXY today?

The DXY reversed after reaching the 105.80 price area overnight, sliding lower toward the 104.90 price level. As there were no major new events, the reversal of the DXY was brief, with the price ending the trading session at the 10.10 price level. Volatility was increased as news of Russian President Putin stating that the “threat of nuclear is on the rise”, saw a slight shift towards safety. Look for the DXY to continue with the reversal overnight, especially if the price breaks below the 105-round number support level, with the next key support level at 104.20. 

Central Bank Notes:

  • Federal Reserve hiked rates by 75bps taking interest rates to 4.00%
  • Next meeting is on 15 December 2022
  • 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 traded slightly higher overnight, breaking out of the recent consolidation to reach the 1790 price area. Anticipating further weakness in the DXY and increasing concerns over a recession in the US and globally, Gold could retrace briefly before continuing to climb higher, if the price breaks above the 1790 interim resistance level with the next key resistance level at the 1809 price area. 

Next 24 Hours Bias

Weak Bullish


The Australian Dollar (AUD)

Key news events today

No major news events. 

What can we expect from AUD today?

The Australian GDP was released at 0.6% (Expected: 0.7% Previous: 0.9%), indicating a slight slowdown in overall economic activity. However, the AUDUSD resisted further downward moves after the price reached the 0.6675 price area. Trading higher, as the DXY weakened, the AUDUSD currently trades above the 0.67 round number. With the price action indicating the potential for further upside, look for the AUDUSD to break above the 0.6740 interim resistance level to signal a continuation upward, with the next key resistance at 0.68.

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?

Similar to the AUDUSD, the NZDUSD was strongly supported at the 0.63 price level, with price surging strongly to the upside. Overnight, the NZDUSD reached a high of 0.6380 before retracing lower again. Currently trading at the 0.6350 price level, look for the price to break above the overnight high before further upside could be anticipated for the NZDUSD, with the next key resistance level of 0.6445.  

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 Bullish


The Japanese Yen (JPY)

Key news events today

No major news events. 

What can we expect from JPY today?

Despite the recent climb in the USDJPY, the upward move was resisted at the 138 resistance area. As the DXY weakened, the USDJPY retraced lower to retest the interim support level of 136.20. As the USDJPY currently trades at the 136.80 price level, look for the price action on the DXY to signal the next directional bias of the USDJPY. If the DXY continues to weaken, look for the USDJPY to break below the 136 round number support level to signal further downward moves, with the next key support level at 135.00. 

Central Bank Notes:

  • Cash rate stands at -0.1%  
  • Expects Short- And Long-Term Policy Rates To Remain At ‘Present Or Lower’ Levels
  • Next meeting is on 20 December  2022

Next 24 Hours Bias

Weak Bullish