IC Markets Asia Fundamental Forecast | 24 November 2022

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What happened in the US session?

The DXY weakened significantly following the release of the Federal Reserve meeting minutes, which saw the major currencies gaining against the Greenback. The S&P 500 gained slightly by 0.59% to reach 4027. 

What does it mean for the Asia Session?

Look for the major currencies to continue trading to the upside if the DXY continues to weaken. However, watch out for choppy price action as the US market is on a bank holiday today. 

The Dollar Index (DXY)

Key news events today

USD Bank Holiday 

What can we expect from DXY today?

Overnight, the DXY broke below the 106.70 price level to trade significantly lower toward the key support area of 105.60. This move lower followed the current downtrend, but was intensified following the release of the FOMC meeting minutes. The meeting minutes indicated that the current monetary policy is ‘approaching a sufficiently restrictive level”. This signaled the possibility that the Federal Reserve could slow down on the scale of further rate increases. However, uncertainty was also cast on the “ultimate level of Fed funds rate required to contain inflation”. Therefore, ook for the DXY to continue falling lower, toward the key support area of 104.65.  Watch out for choppy price action as the US market is closed for thanksgiving today.

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

Medium Bearish


Gold (XAU)

Key news events today

No major news events. 

What can we expect from Gold today?

Gold fluctuated strongly overnight as the price spiked down to the 1726 price level before surging strongly to the upside. Breaking above the 1745 interim resistance level, Gold is currently trading at the 1755 price level. This move higher is primarily due to the current weakness of the DXY. Look for Gold to continue trading higher toward the 1780 price level, with the next key resistance level at 1800. 

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?

As the DXY weakened, the AUDUSD surged strongly to the upside, breaking out of the recent consolidation and beyond the 0.6660 price level. The AUDUSD climbed steadily to break above the immediate resistance level of 0.6750. While a brief retracement could be anticipated, look for the AUDUSD to trade higher, with the next key resistance at 0.69. 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

Medium Bullish 


The Kiwi Dollar (NZD)

Key news events today

No major news events. 

What can we expect from NZD today?

Following the decision of the Reserve Bank of New Zealand (RBNZ) to hike interest rates to 4.25% and the overnight significant weakness of the DXY, the NZDUSD climbed strongly to the upside breaking above the 0.62 round number resistance level. The NZDUSD continued to climb higher, ending the trading session at the 0.6250 price level. If the DXY does continue to weaken, the NZDUSD is likely to continue with the uptrend, with the next key resistance level at 0.6455.

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

Medium Bullish 


The Japanese Yen (JPY)

Key news events today

No major news events. 

What can we expect from JPY today?

Overnight, the USDJPY broke below the 141 round number support level to fall strongly lower. This move to the downside was driven by the weakness of the DXY. The USDJPY broke below the next support level of 140 and is currently trading at the 138.70 price level. While further downside is highly likely, if the DXY continues to weaken, the price would have to break below the 138.50 price level to signal a continuation of the downtrend, with the next key support level at 135.50. 

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

Medium Bullish