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What happened across the Asia session?
Most major currencies consolidated during the Asia session as the DXY retraced briefly.
What does it mean for Europe and US Sessions?
Look out for a recovery in DXY strength but be aware of choppy price action as the markets head into the weekend.
The Dollar Index (DXY)
Key news events today
No major news events.
What can we expect from DXY today?
The DXY surged strongly to the upside following the release of the US Core PPI and PPI at 0.5% and 0.7% respectively. DXY reached a high of 104.15 before retracing sharply back down to the 103.75 price area. With no major news events for the US and the markets heading into the weekend, the DXY could continue to trade lower. Look for the price to retest the 103.50 price level before developing a stronger directional bias. If the price breaks below 103.50, the next key support level is at 103.20.
Central Bank Notes:
- Federal Reserve hiked rates by 25bps taking interest rates to 4.75%
- Next meeting is on 23 March 2023
- Ongoing rate increases will be expected
Next 24 Hours Bias
Weak Bullish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
Gold broke out of the consolidation which it had been trading within for 2 days, trading lower as the DXY strengthened. Gold reached a low of 1827 before trading higher, back into the consolidation range. If the DXY continues to weaken, and if Gold breaks above the 1846 price level strongly, this could signal further upside correction for Gold. Beyond 1846, the next key resistance level is at 1858.
Next 24 Hours Bias
Weak Bullish
The Euro (EUR)
Key news events today
No major news events.
What can we expect from EUR today?
Overnight, the EURUSD traded significantly lower, down to the 1.0655 price level due to the strength of the DXY. Although the EURUSD retraced sharply to the upside, the price did not break above the 1.070 price level, keeping the downtrend valid. If the DXY recovers in strength, the EURUSD could continue to trade lower, breaking below the 1.0660 key support level to trade down to the next support level at 1.0520.
Central Bank Notes:
- Main Refinancing Rate is currently at 3.00%
- Another 50bps rate hike is to be expected for the next meeting.
- Next meeting on 16 March 2023
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 climbed higher from the 0.9220 price level due to the strength of the DXY. However, unlike the other major currency pairs, the USDCHF did not retrace as sharply when the DXY traded lower. Look for the USDCHF to maintain the current upward momentum, with the next resistance level at 0.9295
Central Bank Notes:
- Current policy rate is at 1.00%
- Next meeting on 23 March 2023
Next 24 Hours Bias
Weak Bearish
The Pound (GBP)
Key news events today
No Major News Events
What can we expect from GBP today?
The GBPUSD continues to fluctuate strongly along the 1.20 price level. As the GBPUSD resists further moves to the downside, this could signal the further potential for a more significant bounce to the upside. With no major news events ahead, if the DXY weakens further, the GBPUSD could trade up to the near-term resistance and round number price level of 1.21.
Central Bank Notes:
- Interest rate is currently at 4.00%
- The BoE could pause on further interest rate hikes.
- Next meeting on 23 March 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?
The USDCAD surged strongly to the upside as the price bounced from the 1.3380 price level up to the resistance area of 1.3480. With the current price action indicating a rejection of the resistance level, the USDCAD could trade lower to retest the 1.34 round number level before trading higher again, if the DXY continues to strengthen. Alternatively, the USDCAD could slide back down to the 1.3380 support level.
Central Bank Notes:
- Increased interest rates to 4.50%
- Indicated that the BoC was likely to pause on future rate hikes.
- Next meeting on 8 March 2023
Next 24 Hours Bias
Weak Bullish
Oil
Key news events today
No Major News Events
What can we expect from Oil today?
WTI and Brent traded slightly lower as the price was heavily influenced by the volatility in the DXY. While WTI and Brent is likely to continue trading within a wide range, the current price action indicates potential for a breakout to the downside with the key support levels at 76.50 and 84.00 for WTI and Brent respectively.
Next 24 Hours Bias
Weak Bearish
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