IC Markets Asia Fundamental Forecast | 30 September 2022

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What happened in the US session?

The DXY traded significantly lower, while the S&P500 continue to slide by 2.11% overnight as investors grew increasingly worried about the economy. 

What does it mean for the Asia Session?

Look for the DXY weakness to continue, which could drive prices higher for the major currencies. 

The Dollar Index (DXY)

Key news events today

USD Core PCE Price Index m/m 

What can we expect from DXY today?

The DXY continued trading lower, breaking below the 112 price level. While further downside can be expected, following from the current trend, the DXY could stage a brief retracement first. Look for a possible rejection of the 112.60 interim resistance level to signal a continuation of the downtrend. The Core PCE Price Index to be released today is likely to show continual inflation growth, which could spur further rate hikes from the FOMC.

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?

Gold traded higher overnight as price failed to trade below the interim support of 1640. As the DXY weakens, look for further upside on Gold, with the key resistance level at 1680. However, it is likely that Gold could retrace briefly to test the 1655 price level before a further push to the upside.  

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?

Throught yesterday’s trading session, the AUDUSD showed signs of reversal, as price traded lower from the 0.6535 resistance area to reach a session low of 0.6455. However, the move lower was unsustained with the weakness of the DXY pushing prices back towards the resistance area. Currently trading at the 0.6490 price level, the AUDUSD is likely to fluctuate between 0.6455 and 0.65 for today. 

 

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?

Similar to the AUDUSD, the NZDUSD traded higher overnight as the DXY weakened. With current price action showing a rejection of the 0.5755 price area, the NZDUSD could diverge from the AUDUSD and trade lower more sustainably. Look for the price to test the near term support level of 0.5666.

 

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

Weak Bearish 

The Japanese Yen (JPY)

Key news events today

No Major News Events

What can we expect from JPY today?

The USDJPY pair had a weak bullish movement overnight towards the key 145 level. The amount spent by Japan’s government intervening in the foreign exchange market last week to prop up the yen will be revealed on Friday, which may highlight the difficulties Tokyo may face in making frequent forays into the market to stem sharp falls. Even though there are no major news events for the JPY today, traders should exercise caution. Price is likely to remain below the 145 level as we head into the end of the trading day. 

Next 24 Hours Bias

Weak Bearish