What happened in the US session?
The US dollar continued to strengthen, gaining against most major currencies. The equity markets closed slightly higher building on its four-week win streak.
What does it mean for the Asia Session?
Prices could retrace briefly before trading lower again if the DXY continues to strengthen through the daily trading session.
The Dollar Index (DXY)
Key news events today
USD Core Retail Sales m/m
USD Retail Sales m/m
What can we expect from DXY today?
The DXY climbed steadily higher towards the key resistance area of 106.50. With no major news events for the US, the DXY could retrace briefly before trading higher again. Look for the price to bounce off the 106 area, and if the price closes above 106.50, the next key resistance area is at 107.30.
Central Bank Notes:
- Federal Reserve hiked rates by 75bps taking interest rates to 2.50%
- Next meeting on 22 September 2022
- Balance Sheet reduction plan to continue at $60b (treasuries) and $35b (MBS) over a three-month timeframe
Next 24 Hours Bias
Medium Bullish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
The overnight correction in Gold brought the price lower towards the 1770 support area. With Gold currently trading at 1780, look for a potential rebound towards the 1790 price area before a possible retest of the support level again. If the price breaks below 1770, the next key support area is at 1750.
Next 24 Hours Bias
Weak Bearish
The Australian Dollar (AUD)
Key news events today
AUD Wage Price Index q/q
What can we expect from AUD today?
Following the AUDUSD’s consolidation at the resistance area of 0.7145, the AUDUSD traded significantly lower overnight, to break below the 0.7050 support level. Look for this downtrend to continue towards the 0.6960 key support level. As the release of the monetary policy meeting minutes did not surprise markets, look for the AUDUSUD to retrace briefly towards the near-term resistance level of 0.7050 before resuming the downtrend.
Central Bank Notes:
- Possible 25 to 50bps rate hike
- Meeting on 6 September 2022
Next 24 Hours Bias
Weak Bearish
The Kiwi Dollar (NZD)
Key news events today
NZD Official Cash Rate
NZD RBNZ Monetary Policy Statement
NZD RBNZ Rate Statement
What can we expect from NZD today?
The RBNZ increased interest rates by 50bps The NZDUSD reversed significantly from the key resistance level of 0.6465. The kiwi slid below the 0.64 round number support to reach the 0.6350 interim support level in the lead-up to the RBNZ interest rate decision on Wednesday. With the markets expecting a dovish rate hike, a move to the downside can be expected for the NZDUSD. Look for the price to break below the 0.6350 level to signal a further confirmation of the downtrend, with 0.63 and 0.6230 the next key support levels.
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?
The USDJPY climbed towards the 134.50 price level before consolidating below the interim resistance level. Early in the trading session, the USDJPY retraced to test the 134 round number price level. With no major news for the Yen, further upside on the USDJPY will be dependent on the volatility in the DXY. The price could consolidate between 134 and 134.50 in the lead-up to the US core retail sale data release. If the DXY strengthens, look for the USDJPY to close above the 134.50 level to signal further upside towards the 136 resistance level.
Central Bank Notes:
- Policy settings were unchanged with rates kept at -0.10%
- Reiterated that rates will stay low for the foreseeable future and won’t hesitate to add stimulus if the economy needs it
- Next meeting on 22 September 2022
Next 24 Hours Bias
Weak Bearish
