IC Markets Asia Fundamental Forecast | 01 December 2022

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What happened in the US session?

The markets saw significant volatility through the US session as Federal Reserve Chair Powell commented that interest rates hikes could be scaled back “as soon as December”. The S&P 500 closed significantly higher by 3.09% at 4,080.11.

What does it mean for the Asia Session?

Look for increased volatility on the DXY with the major currencies likely to gain against the Greenback as the DXY reverses from the overnight high. 

The Dollar Index (DXY) 

Key news events today

USD Fed Chair Powell Speaks 

USD Core PCE Price Index m/m 

USD ISM Manufacturing PMI 

What can we expect from DXY today?

The DXY rose sharply early during the US session to reach a high of 107 as the GDP data was released better than expected at 2.9% (Forecast: 2.8%). However, the move higher was unsustained as the DXY reversed due to comments from Federal Reserve Chair Powell. Indicating that the Federal Reserve could slow down interest rate hikes in December and that they did not want to overtighten, the dovish sentiment brought downward pressure on the DXY. The DXY ended the trading session below 106 with the current price at 105.60. While the DXY could retrace briefly, look for further downside, with the next key support level at 105.25. 

Central Bank Notes:

  • Federal Reserve hiked rates by 75bps taking interest rates to 4.00%
  • Next meeting is on 15 December 2022
  • 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

Medium Bearish


Gold (XAU)

Key news events today

No major news events. 

What can we expect from Gold today?

Gold surged strongly higher as the DXY weakened. The price broke out of the consolidation, above the 1760 price level to reach a high of 1780. As further downside is anticipated for the DXY, Gold is likely to continue trading higher with the immediate key resistance level at 1785. If Gold breaks above 1785, the next key resistance levels are at 1800 and 1875. 

Next 24 Hours Bias

Medium Bullish 


The Australian Dollar (AUD)

Key news events today

No major news events. 

What can we expect from AUD today?

The AUDUSD rejected the 0.67 round number support to climb strongly to the upside toward the 0.68 resistance level. This move higher was primarily driven by the weakness of the DXY overnight. With no major news for the AUD on the horizon, further upward moves for the AUDUSD will be dependent on the DXY. If the price breaks strongly above the 0.68 resistance level, the next key resistance levels are 0.6950 and 0.7040. 

Central Bank Notes:

  • Cash rate stands at 2.85% 
  • Future rate rises will be determined by data, the outlook for inflation, and the labour market.
  • Next meeting on 6 December 2022

Next 24 Hours Bias

Medium Bullish 


The Kiwi Dollar (NZD)

Key news events today

No major news events. 

What can we expect from NZD today?

The NZDUSD has climbed steadily, breaking above the 0.6290 resistance level overnight, reaching a significant high of 0.63. Currently trading at 0.6325, the price action is indicating that the uptrend of the NZDUSD is likely to continue. Look for further weakness on the DXY which could lead the NZDUSD to retrace or consolidate briefly before trading higher again, with the next key resistance level at 0.6450. 

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

Medium Bullish


The Japanese Yen (JPY)

Key news events today

No major news events. 

What can we expect from JPY today?

The USDJPY rose briefly as the price broke out of the recent consolidation to test the 140-round number resistance level. However, the move higher was quickly reversed following comments from Fed Chair Powell and the resulting weakness of the DXY. The USDJPY fell, breaking below the 137.80 support area to reach a significant low of 136.77. Look for the USDJPY to continue with the current downtrend, trading lower toward the next key support level of 131.45. 

Central Bank Notes:

  • Cash rate stands at -0.1%  
  • Expects Short- And Long-Term Policy Rates To Remain At ‘Present Or Lower’ Levels
  • Next meeting is on 20 December  2022

Next 24 Hours Bias

Medium Bullish