IC Markets Asia Fundamental Forecast | 25 January 2023

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What happened in the US session?

Most major currencies traded with choppy price action overnight, with the S&P 500 closing slightly lower at the 4,016 price level. 

What does it mean for the Asia Session?

Look out for higher volatility on the AUDUSD following the CPI data release. 

The Dollar Index (DXY) 

Key news events today

No major news events. 

What can we expect from DXY today?

The DXY spiked strongly to the upside to test the 102 price level overnight, but the move higher was quickly retraced as the DXY reversed to consolidate along the 101.65 price level. With no major news head for the DXY, the price could consolidate along the 101.60 price level for now. If the price breaks below 101.60, the DXY could trade lower toward the 101.30 key support level. Alternatively, if the DXY breaks out of the current consolidation to the upside, look for the DXY to trade toward the 102-round number resistance level again.

Central Bank Notes:

  • Federal Reserve hiked rates by 50bps taking interest rates to 4.50%
  • Next meeting is on 2 February 2023
  • Further rate increases are expected to slow

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 with significantly choppy price action overnight as the price rejected the 1940 price level strongly. After the price reach the 1940 price level, Gold spiked lower toward the key support level of 1920. However, the move lower was quickly retraced as Gold ended the trading session consolidating at the 1938 price level. Currently, Gold is indicating a retracement lower again, with the price signaling a potential break of the 1930 price level. Look for Gold to complete the retracement before trading with the uptrend again, with the next key resistance level at 1950. 

Next 24 Hours Bias

Weak Bullish


The Australian Dollar (AUD)

Key news events today

AUD CPI y/y

What can we expect from AUD today?

Inflation in Australia continues to climb with the CPI y/y data released significantly higher than expected at 8.4% (Forecast: 7.6% Previous: 7.3%). With inflation still climbing, the market expectation now is for the Reserve Bank of Australia (RBA) to potentially react with further interest rate increases. Following the data release, the AUDUSD spiked strongly to the upside from the 0.7050 price level up toward 0.71. Look for the upside potential to continue if the AUDUSD breaks above the round number resistance of 0.71, with the next key resistance level at 0.73. 

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

Medium Bullish


The Kiwi Dollar (NZD)

Key news events today

NZD CPI q/q  

What can we expect from NZD today?

The CPI q/q data for New Zealand was released at 1.4% (Expected: 1.3% Previous: 2.2%) which signals continual inflation growth. The NZDUSD traded lower following the release of the CPI data, with the NZDUSD reversing from the 0.65 round number resistance level to trade at the 0.6480 price level. Look for the NZDUSD to trade higher, after the current retracement, following the current uptrend toward the key resistance level of 0.6525.

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?

Recently, the USDJPY bounced off the 128 support level to trade higher toward the 130 price level, due to the brief DXY strength. Overnight the USDJPY traded with choppy price action as the price fluctuated between the 129.80 and 131 price range. Currently, the USDJPY is trading at the 130.30 price level with downside potential expected, if the DXY continues to weaken. Look for the USDJPY to break below the 129.80 price level to signal a confirmation of the move lower, with the next key support level at 128. 

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 Bullish