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IC Markets Asia Fundamental Forecast | 30 January 2023

What happened in the US session?

The major currencies traded with choppy price action as the markets headed into the weekend, with prices maintaining along the key resistance levels. The S&P closed slightly higher by 0.25% at the 4070 price level. 

What does it mean for the Asia Session?

Look for prices to continue with the current retracement, with breakout potential if the DXY continues to strengthen. 

The Dollar Index (DXY) 

Key news events today

No major news events. 

What can we expect from DXY today?

On Friday, the DXY spiked up toward the 102 price level but the move higher was quickly reversed with the DXY continuing to trade along the 101.70 price range. The short-term volatility for the DXY on Friday was due to the release of the Core PCE price index at 0.3% as expected. The DXY is unlikely to develop a strong directional bias in the interim, with the US Federal Reserve meeting due later in the week. However, if the DXY breaks above the 102-round number resistance level, further upside could be anticipated, with the next key resistance level at 102.50. 

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 Bullish


Gold (XAU)

Key news events today

No major news events. 

What can we expect from Gold today?

As Gold reversed from the 1945 price area to trade significantly lower toward the end of the trading session last week, the price consolidated below the 1930 price level on Friday with choppy price action. Look for further downside potential on Gold, if the price breaks below the 1920 price level, indicating a continuation of the move lower. This move lower would be dependent on further strength to develop for the DXY. The next key support level for Gold is at the 1900 price level. 

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 continues to consolidate below the 0.7130 price level, with the price fluctuating between 0.7080 and 0.7130 on Friday. If the price of the AUDUSD breaks below the 0.7075 price level, further downside could be expected, with the next key support level at 0.70. However, with no major news events on the horizon, the AUDUSD is likely to continue consolidating along the current price level for the interim. 

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

Weak Bearish


The Kiwi Dollar (NZD)

Key news events today

No major news events. 

What can we expect from NZD today?

The NZDUSD traded with choppy price action through the trading session on Friday as the price maintained under the 0.65 round number resistance level. Today, the NZDUSD climbed to the 0.65 price level again but the current price action indicates a rejection of the resistance level. Look for a brief retracement to the downside, with the NZDUSD likely to test the 0.6450 price level. However, look for buying opportunities on completion of the retracement, with 0.6540 as a potential target level.  

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?

Through the trading session on Friday, the USDJPY fluctuated between the 129.55 and 130.25 price range with no clear directional bias. The price traded in the horizontal range as the DXY also consolidated. The USDJPY is likely to continue trading along the 130 price range with the US Federal Funds Rate decision due later in the week. Look for breakout potential to the upside if the USDJPY breaks above the 130.50 price level, with the next key resistance level at 131.70. 

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 Bearish

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