IC Markets Europe Fundamental Forecast | 09 August 2022

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What happened across the Asia session?

Most currencies traded in consolidation through the Asia session, with the AUDUSD trading higher towards the near-term resistance level.

What does it mean for Europe and US Sessions?

No major news events are scheduled for the major currencies, which could lead to prices continuing to retrace from Friday’s move. Look for a possible resumption of the trend following the completion of the current retracements.

The Dollar Index (DXY)

Key news events today

No major news events.

What can we expect from DXY today?

The DXY traded slightly lower to rest at the 106.25 price level. The DXY could continue to consolidate at this level with market volatility currently lower. However, look for a potential move to the upside and to the 107 resistance level, if the price is able to close above 106.50.

Central Bank Notes:

  • Federal Reserve hiked rates by 75bps taking interest rates to 2.50%
  • Next meeting on 22 September 2022
  • Balance Sheet reduction plan to continue at $60b (treasuries) and $35b (MBS) over a three-month timeframe

 

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

No major news events. 

What can we expect from Gold today?

Gold climbed to test the 1790 resistance level again. However, the price looks to be rejecting the resistance area, potentially forming a double top reversal pattern. Look for price to trade lower, with significant strength towards the near-term support level of 1750.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

No Major News Events  

What can we expect from EUR today?

The EURUSD consolidates at the 1.020 price level after breaking over the 1.019 resistance level. Look for the EURUSD to climb briefly to test the 1.0225 resistance level, with sustained upside moves unlikely. Look for a possible break of the 1.019 support level to signal a more significant move to the downside, to the 1.012 support level. 

 

Central Bank Notes:

  • Raised rate by 50bps 
  • Next meeting on 8 September 2022

 

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No Major News Events 

What can we expect from CHF today?

The USDCHF traded lower entering into the 0.9550 price range. With a persistent long-term downtrend, any moves to the upside are likely to be unsustained. Look for the price break below the 0.9550 support area to trade towards the 0.9490 support level.

 

Central Bank Notes:

  • Surprise rate hike by 50bps to -0.25%
  • Next meeting on 22 September 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?

The GBPUSD climbed strongly from the strong support level to reach 1.2120. However, the price action signaled a reversal and the GBPUSD currently trades at 1.2085. Look for the GBPUSD to break below the key support level of 1.2025 to signal a strong move to the downside. However, for a sustained move to the downside on the GBPUSD, it would highly dependent on the recovery and overall strength of the DXY. 

Central Bank Notes:

  • Interest rate currently at 1.75%
  • Peak inflation revised to more than 15% in 2023. 
  • Next meeting on 15 September 2022

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

No Major News Events

What can we expect from CAD today?

The USDCAD continued to trade lower to reach the 1.2850 price level. In the absence of major news events, the USDCAD could continue with the correction to the downside following the short-term trend. The USDCAD is likely to continue trading between the 1.28 and 1.29 price range. Look for the price to break below the 1.2850 price level to trade towards the 1.28 support level. 

Central Bank Notes:

  • Increased rates by 100bps, taking interest rates to 2.50% 
  • Indicated further rate increases likely.
  • Next meeting on 7 September 2022

Next 24 Hours Bias

Medium Bearish

Oil

Key news events today

No Major News Events 

What can we expect from Oil today?

Overnight, energy prices traded at the key support areas, with no clear directional bias yet. As Brent and WTI climbed towards the near-term resistance levels in the short term, the price could retrace lower from the current resistance, with Brent reaching 97 and WTI dropping to 89.00.

Next 24 Hours Bias

Weak Bearish