What happened across the Asia session?
Most currencies continued to consolidate during the Asia session as the DXY traded below the 103 price level.
What does it mean for Europe and US Sessions?
If the DXY continues to weaken, look for the major currencies to continue to gain against the US dollar.
The Dollar Index (DXY)
Key news events today
No major news events.
What can we expect from DXY today?
The DXY continued its slide lower with the price trading along the 102.70 price level at the end of the trading session. With no major news on the horizon for the US dollar, look for the DXY to consolidate along the current price level before possibly trading lower again. If the DXY breaks below the 102.70 price level, further downside can be expected, with the next key support levels at 102.50 and 102.00.
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 Bearish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
Following the high volatility move on Friday, Gold traded in a consolidation between the 1868 and 1880 price levels through the trading session yesterday. It is likely that Gold could continue to consolidate at this level in the interim. Look for the development of the price action to indicate further upside potential, especially if the price breaks above the 1880 price level to indicate a continuation of the uptrend, with the next key resistance level at 1900.
Next 24 Hours Bias
Weak Bullish
The Euro (EUR)
Key news events today
No Major News Events
What can we expect from EUR today?
The EURUSD broke above the 1.0650 resistance level to climb higher through the trading session yesterday, to reach a high of 1.0760. However, after testing the near-term high, the EURUSD consolidated along the 1.0730 price level as the DXY paused on its decline. Look for the EURUSD to trade higher if the price breaks above the 1.0760 price level, with the next key resistance level at 1.0950.
Central Bank Notes:
- Main Refinancing Rate is currently at 2.50%
- Significant and consistent rate hikes expected from the ECB
- Next meeting on 2 February 2023
Next 24 Hours Bias
Weak Bullish
The Swiss Franc (CHF)
Key news events today
No Major News Events
What can we expect from CHF today?
The USDCHF continued to slide overnight as the price tested a low of 0.9165 but the move lower was quickly reversed, with the USDCHF consolidated along the 0.92 round number price level. Currently trading at the 0.9220 price level, a retracement to the upside would depend on a recovery in strength in the DXY, with the immediate resistance level at 0.9260. However, if the DXY continues to weaken, look for the price of the USDCHF to trade lower toward the next key support level of 0.91.
Central Bank Notes:
- Current policy rate is at 1.00%
- Next meeting on 23 March 2023
Next 24 Hours Bias
Weak Bullish
The Pound (GBP)
Key news events today
No Major News Events
What can we expect from GBP today?
Overnight, the upward move on the GBPUSD was resisted by the 1.2210 price level. With no major news on the horizon for the Pound, look for the price to range between 1.2150 and 1.22, with the potential for a breakout to the upside. If the GBPUSD breaks above the 1.22 price level strongly, due to further weakness in the DXY, the GBPUSD could trade higher toward the next key resistance level of 1.23.
Central Bank Notes:
- Interest rate is currently at 3.50%
- Peak inflation revised to more than 15% in 2023.
- Next meeting on 2 February 2023
Next 24 Hours Bias
Weak Bullish
The Canadian Dollar (CAD)
Key news events today
No Major News Events
What can we expect from CAD today?
Despite the strong decline in the USDCAD recently, the move lower halted at the key support level of 1.3360. With the price consolidating at the key support level, the next directional move on the USDCAD could be dependent on the DXY. The USDCAD could retrace higher briefly, however, look for the USDCAD to break below 1.3360 to signal a continuation of the downtrend, with the next key support level at 1.32.
Central Bank Notes:
- Increased interest rates to 3.75%
- Surprised markets with only 50bps hike in October
- Future hikes determined by future inflation data and expectations
- Next meeting on 25 January 2022
Next 24 Hours Bias
Weak Bullish
Oil
Key news events today
No Major News Events
What can we expect from Oil today?
Overnight, Energy prices traded with choppy price action testing higher briefly before ending the session lower as the weakness in the DXY paused at the key support level. WTI climbed higher to the 77.00 price level before trading at the current price level of 74.30. Brent tested the 81.00 round number level before trading lower again, with the price currently at 79.20. Look for the downward momentum to continue, with the key support level at 78.00.
Next 24 Hours Bias
Weak Bearish
