What happened in the US session?
During the US session, the upside on the DXY was resisted by the 106.75 price level, while the S&P500 closed slightly lower by 0.16% at 3,957.63.
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 ADP Non-Farm Employment Change
USD Prelim GDP q/q
USD JOLTS Jobs Openings
What can we expect from DXY today?
The DXY continues to trade in a relative consolidation, between the price range of 106.00 and 106.75, with no clear directional bias. The US GDP q/q due today is expected to be released at 2.8% which would be better than the previous of 2.6% which could lead the DXY to strengthen. Currently trading at 106.60, look for the DXY to break above 107.00 to signal further upside potential, with the next key resistance at 107.75. Alternatively, if the price action on the DXY signals a rejection of the upside, the price could trade lower toward the 105.40 price level.
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
Weak Bullish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
Gold bounced higher from the 1740 price level to trade toward the 1759 price level. However, the price reversed slightly to continue consolidating along the 1750 price level. As Gold trades within the current consolidation, look for a breakout potential if the price is able to close above 1760 level, with the next key resistance level at 1785. However, for Gold to trade sustainably higher, it is anticipated that the DXY would have to weaken back down to the 106 price level.
Next 24 Hours Bias
Weak Bullish
The Australian Dollar (AUD)
Key news events today
AUD CPI y/y
What can we expect from AUD today?
Today, the Australian CPI y/y was released at 6.9% (Forecast: 7.6% Previous: 7.3%) which signaled a slowdown in the overall inflation growth. On the release of the economic data, the AUDUSD traded slightly higher from the 0.6680 price level toward the 0.67 round number resistance level. Look for the price to break above 0.67 to signal a stronger reversal higher, with the next key resistance level at 0.6780.
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
Weak Bullish
The Kiwi Dollar (NZD)
Key news events today
No major news events.
What can we expect from NZD today?
Similar to the AUDUSD, the NZDUSD traded higher overnight, reaching a high of 0.6250 due to weakness in the DXY early in the trading session yesterday. However, the price retraced to end the trading session at the 0.6190 price level. Currently trading at the 0.6215 price level, look for the NZDUSD to consolidate before potentially trading higher toward the next key resistance of 0.6290.
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 Bullish
The Japanese Yen (JPY)
Key news events today
No major news events.
What can we expect from JPY today?
The USDJPY had a close to 150pip fluctuation overnight as it ranged between the 137.90 and 139.35 price range. However, the USDJPY ended the trading session relatively unchanged at the 138.60 price level. If the price continues to reject the 139 round number resistance level, price action on the USDJPY could signal the potential for further downside. Look for the USDJPY to break below 138 to trade lower toward the 137.50 interim support, with the next key support level at 134. Alternatively, if the DXY strengthens significantly, the USDJPY could break above 139 and climb higher toward the next key resistance level of 139.60.
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
Weak Bullish
