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IC Markets Asia Fundamental Forecast | 31 January 2023

What happened in the US session?

The DXY strengthened against the major currencies during the US session, while the S&P closed lower by -1.30%, ending the session at the 4,017 price level. 

What does it mean for the Asia Session?

Look for prices to continue trading lower with the DXY strength anticipated to continue for the interim. 

The Dollar Index (DXY) 

Key news events today

USD CB Consumer Confidence 

What can we expect from DXY today?

Despite a lack of major news events, the DXY climbed strongly to the upside, bouncing off the 101.50 price level to climb toward the 102 price level. This move higher was driven by the weakness in the EURUSD, rather than the strength of the DXY. If the DXY breaks above the 102 price level, further upside could be anticipated, with the key resistance level at 102.50. This move higher could be brief with choppy price action as the markets remain poised for the US Federal Reserve Interest Rate decision on Thursday. 

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?

Gold traded between the price range of 1921 and 1932 through the trading session yesterday, with no clear directional bias, despite the brief recovery in strength of the DXY. However, as the price was supported at the 1921 price level, Gold could rebound higher toward the high of the current price range at 1932. Gold is likely to continue trading within this range for the interim, in the lead-up to the US Federal Reserve interest rate decision on Thursday. 

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?

Through the trading session yesterday, the AUDUSD slid steadily lower, breaking through the 0.7075 price level and is currently trading below 0.7050. If the DXY continues to strengthen, this could cause the AUDUSD to continue with the downward momentum. Look for the AUDUSD to break below the 0.7040 price level to signal a confirmation of the correction lower, with the next key support at 0.6975 price level. 

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 consolidated below the 0.65 price level with choppy price action overnight. With the resistance level preventing further upside, the NZDUSD has traded significantly lower early in the trading session today, reaching a near-term low of 0.6450. With no major news events ahead, look for the price to break below the current price level to indicate a continuation of the downside, with the next 0.6390. 

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 Bearish


The Japanese Yen (JPY)

Key news events today

No major news events. 

What can we expect from JPY today?

The USDJPY climbed steadily to the upside overnight as the price bounced from the 129.50 price area, up toward the 130.50 price level. However, as the price failed to break above the resistance level, the USDJPY reversed early in the trading session today. Currently trading at the 130.15 price level, look for the USDJPY to break below the 130 price level to indicate further a continuation to the downside, with the next key support level at 129.30. 

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

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