What happened in the US session?
The US dollar traded with significant volatility but with no clear directional bias while the S&P closed lower by 1.11% at the 4,117 price level.
What does it mean for the Asia Session?
Look for the major currencies to rise against the DXY with the weakness anticipated to continue for the Greenback.
The Dollar Index (DXY)
Key news events today
No major news events.
What can we expect from DXY today?
The DXY traded with significant volatility with the price testing the 102.90 support level before retracing sharply higher, reaching an overnight high of 103.40. With no major news events scheduled for the USD, DXY is likely to continue fluctuating within the current range. While current price action indicates a rejection of the upward move, look for the DXY to retrace down toward the near support of 102.90, especially if the price breaks through the round number level of 103.
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 Bearish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
Although Gold traded between the price range of 1869 and 1886, the failure to trade significantly lower could signal a brief pause in the downtrend. If the DXY continues to weaken, Gold could trade higher toward the immediate resistance level of 1905. However, this would first require the price to break beyond the near-term high of 1886.
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 AUDUSD traded with significant volatility overnight as the price rejected the 0.70 round number resistance level, trading down to the 0.6920 price level. Today, the price action on the AUDUSD signaled a rejection of the downside, with the price climbing higher toward the 0.6950 level. Look for a continuation of the retracement higher to retest the 0.70 round number resistance level again. If the price breaks beyond the 0.70 price level, the next key resistance is at 0.7080.
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 Bullish
The Kiwi Dollar (NZD)
Key news events today
No major news events.
What can we expect from NZD today?
The NZDUSD climbed to a high of 0.6340 overnight before retracing down to end the session at the 0.63 price level. As the DXY weakens, look for the NZDUSD to trade higher from the 0.63 price level toward the near-term resistance level of 0.6380. However, significant upside potential could be limited and highly dependent on the DXY. If the price action at the 0.6380 signals a rejection, the NZDUSD could retrace back down again, with price fluctuations maintaining between the 0.63 and 0.6380 price range.
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?
The USDJPY traded relatively unchanged overnight, with the price fluctuating along the 131 round number price level. With no major news events ahead, the volatility of the USDJPY is likely to be driven by the next directional move of the DXY. Early in the trading session, the USDJPY spiked up beyond 131.50 but the move was sharply reversed. Look for the USDJPY to retest the 131 round number support level before further upside potential, with the next key resistance level at 132.65.
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
