IC Markets Asia Fundamental Forecast | 28 September 2022

IC Markets No Comments

 

What happened across the Asia session?

With no key news release, most currencies are retracing from the brief move lower early in the trading session. 

What does it mean for Europe and US Sessions?

Look for the DXY to complete the retracement and to recover into strength, which could lead to further downside on the major currencies. 


The Dollar Index (DXY)

Key news events today

USD Fed Chair Powell Speaks  

What can we expect from DXY today?

The DXY climbed to a high of 114.50 as the dollar found strength following increasing hawkish sentiment as the Federal Reserve officials look towards further rate hikes to fight inflation. Breaking out of the consolidation from the past 2 days, further upside is anticipated for the DXY, with the 115 resistance level a key target. However, the price is likely to retrace briefly to test 114.30 before a move higher.

Central Bank Notes:

  • Federal Reserve hikes rates by 75bps taking interest rates to 3.25%
  • Next meeting on 3 November 
  • 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 Bullish 

Gold (XAU)

Key news events today

No major news events. 

What can we expect from Gold today?

Overnight, Gold traded lower towards the 1625 support level, as the DXY recovered in strength. While further downside can be anticipated, Gold could find strong support at the 1620 price level. Look for the development of price action to indicate the next directional bias. If Gold bounces from the support level, the price could retest 1635 interim resistance level.  

Next 24 Hours Bias

Weak Bullish

 

The Euro (EUR)

Key news events today

No Major News Event

What can we expect from EUR today?

No major news event but EURUSD plunged overnight as price trades around the 0.9554 levels. The PMI data came out higher at 49.2 as compared to the forecast of 45.5 and along with the border uncertainty between Russia and Ukraine, the predicted move lower to the downside for the EURUSD has been anticipated. The next important support level is at 0.8371 which was the previous low back in 2001- therefore watch for a price break below the current support level to indicate the further possibility for downward movement.

Central Bank Notes:

  • Next meeting on 27 October 2022

 

Next 24 Hours Bias

Medium Bearish

The Swiss Franc (CHF)

Key news events today

No Major News Event

What can we expect from CHF today?

DXY has yet again strengthened overnight causing the USDCHF to surge. No major news event but with a rate increase of 75 bps anticipated in the SNB rate decision, the CHF has created some volatility in the market and is projected to strengthen. We’re looking at price to break the key level at 0.9973 before moving towards 1.0046 levels 

 

Central Bank Notes:

  • Next meeting on 15 December 2022

 

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

No Major News Events

What can we expect from GBP today?

GBPUSD looks like it’s in continuation of a bearish trend with prices bouncing off the resistance level at 1.0915. The Bank of England announced that it was monitoring the markets very closely. Although this failed to bring significant upside to the GBPUSD, it halted the strong decline as price consolidated at the 1.08 price area. With the strong downtrend, look for the GBPUSD to continue trading lower, especially when the DXY continues to recover in strength. If price breaks below the 1.07 interim support level, the GBPUSD could retest the immediate support level of 1.0355 again.

Central Bank Notes:

  • Interest rate is currently at 2.25%
  • Peak inflation revised to more than 15% in 2023. 
  • Next meeting on 3 November 2022

Next 24 Hours Bias

Medium Bearish 

The Canadian Dollar (CAD)

Key news events today

No Major News Events 

What can we expect from CAD today?

As the DXY gained momentum, the USDCAD surged sharply to reach the 1.3760 price level. Further gains are projected as long as the upward trend continues and there are no significant upcoming news events for the Canadian economy. Look for buying chances on the USDCAD, after price breaks above the 1.38 interim resistance level, with the next significant resistance level at 1.40.

Central Bank Notes:

  • Increased interest rates to 3.25%  
  • Indicated further rate increases likely.
  • Next meeting on 26 October 2022

Next 24 Hours Bias

Medium Bearish

Oil

Key news events today

No Major News Events 

What can we expect from Oil today?

Overnight on oil, both Brent & WTI has continued their bearish momentum downwards, with Brent trading at 85.373 and WTI at 77.363. Last night, sabotage was suspected after unexplained leaks were found on major Russian gas pipelines, which could bring significant volatility to the energy prices. Do be cautious ahead today if you are trading oil. With no other major news on oil for today, expect Brent to head towards 83.024 and WTI to head towards the 75.313 level. 

Next 24 Hours Bias
Weak Bearish