IC Markets Asia Fundamental Forecast | 23 November 2022

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What happened in the US session?

Overnight the markets traded steadily higher as the DXY weakened from the near-term high. The S&P 500 rallied to break above the 4000 mark, ending the trading session up by 1.36%. 

What does it mean for the Asia Session?

Look toward the NZDUSD and AUDUSD for higher volatility following the release of the RBNZ’s decision to hike interest rates to 4.15%. 

The Dollar Index (DXY)

Key news events today

USD Flash Services PMI  

What can we expect from DXY today?

Overnight, the DXY continued its slide as the price broke below the 107.50 price level to reach 106.90. Despite a lack of major news events, the DXY trading lower was likely due to the strength of the EURUSD. If the DXY breaks below the 106.70 price level, further downside can be anticipated with the next key support level at 106.25 and 105.60. Alternatively, if the services PMI is released stronger than anticipated today, the DXY could rebound above 107 to trade higher toward the near-term high of 107.80.  

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?

The slide in Gold paused at the 1735 level as the price bounced toward the 1750 interim resistance level. Gold is likely to fluctuate between the 1735 and 1750 price level, with the directional bias dependent on the volatility of the DXY. If the DXY recovers in strength, Gold could break below 1735 to trade lower toward the next key support level of 1700. 

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 climbed steadily higher overnight, with the price reaching a high of 0.6650. Early in the trading session today, the AUDUSD trading with higher volatility due to the correlation with the NZDUSD. As the price consolidates below the 0.6650 price level, look for a breakout potential with the next key resistance level at 0.6730, with a hesitation level at 0.6690. Further upside on the AUDUSD would depend on further strength on the NZDUSD or weakness on the DXY. 

Central Bank Notes:

  • Cash rate stands at 2.85% 
  • Future rate rises will be determined by data, the outlook for inflation, and the labour market.
  • Next meeting on 6 December 2022

Next 24 Hours Bias

Bullish 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 Reserve Bank of New Zealand (RBNZ) stepped up its fight against inflation with a record rate hike of 75bps, taking interest rates to 4.25%. The accompanying statement indicated that interest rates in New Zealand could peak at 5.50%, signaling the possibility of more rate hikes to come. On the release of the rate hike decision, the NZDUSD spiked higher to test the 0.62 price area before retracing quickly again. While significant volatility is expected for the NZDUSD today, look for the price to continue climbing, and if the price breaks beyond the 0.62 resistance level, the next key resistance level is at 0.6350.

Central Bank Notes:

  • Cash rate stands at 3.50% 
  • Central bank is likely to continue with the current path of rate adjustment
  • Next meeting is on 23 November 2022

Next 24 Hours Bias

Medium Bullish 


The Japanese Yen (JPY)

Key news events today

No major news events. 

What can we expect from JPY today?

Through the trading session yesterday, the USDJPY continued to retrace lower from the high of 142.30 to reach a low of 141. This move lower was in line with the weakness of the DXY as the price fell toward the 106.95 price level. If the price action signals a rejection of the 141 round number support level, the USDJPY could rebound to the upside, back toward the 143 resistance level. Alternatively, if the USDJPY breaks below 141, further downside can be anticipated, with the next key support level at 140.40. 

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 Bearish