IC Markets Asia Fundamental Forecast | 29 September 2022

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What happened in the US session?

The DXY traded significantly lower as the major currencies gained against the US dollar. The equity markets close 1.97% higher overnight as the US dollar slid lower. 

What does it mean for the Asia Session?

Look for the major currencies to reverse from the overnight retracement if the DXY continues to recover in strength. 

The Dollar Index (DXY)

Key news events today

No major news events. 

What can we expect from DXY today?

The DXY retraced strongly from the 114.70 resistance area overnight. The DXY ended the trading session significantly lower at the 112.45 price level. This move was likely due to the intervention from the BoE in an attempt to manage the decline of the GBPUSD. With the DXY currently trading at the 113.20 price level, look for the DXY to recover towards the 114.50 price level if it is able to trade higher above 113.50. 

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 retraced strongly as the price rejected the support level of 1616 and was pushed higher due to the weakness of the DXY. With the price currently at the 1655 price level, price action on Gold shows a rejection of the 1665 resistance level. Look for Gold to trade lower towards the 1630 interim support level if the DXY recovers in strength.  

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?

With the pullback of the DXY, AUDUSD rose from the 0.6360 to 0.6532 and now is going back to the downside trend. There is no key news for AUDUSD today, the price is impacted more by USD. With the DXY recovering, the AUDUSD may continue the descending trend. The next key support level could be at 0.63640, where the previous lowest price is.

 

Next 24 Hours Bias

Medium Bearish

The Kiwi Dollar (NZD)

Key news events today

NZD ANZ Business Confidence 

What can we expect from NZD today?

Early in the trading session, the NZDUSD reached the 0.5730 level and is showing a pullback trend now. The ANZ Business Confidence data was released which indicated -36.7, which is higher than the previous data, however, it still remains within the negative territory. The next key support level could be at 0.5580, which is the recent lowest price.

 

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

Medium Bearish 

 

The Japanese Yen (JPY)

Key news events today

No Major News Events

What can we expect from JPY today?

Overnight on USDJPY pair, price had a weak bullish movement away from the key 145 level. Yesterday the Monetary Policy Meeting Minutes was released with little to no impact on price. The BOJ board agreed they must be vigilant to sharp Yen moves. Expecting some further bearishness on USDJPY towards the 143.200 level for retracement. With no major news events for JPY today, do still be cautious when trading 

 

Next 24 Hours Bias

Weak Bearish