What happened across the Asia session?
Most major currencies rose briefly against the DXY but consolidated at the interim levels heading into the European session.
What does it mean for Europe and US Sessions?
Look out for further strength of the DXY and for the major currencies to reverse lower from the current consolidations.
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 Euro (EUR)
Key news events today
No major news events.
What can we expect from EUR today?
The EURUSD traded within a relatively narrow range of 1.0320 and 1.0390, resisting further moves to the upside. As the price action signals further downside potential, look for the EURUSD to break below the round number support level of 1.0300 to confirm the downtrend. If the EURUSD resumes with the downtrend, the price could slide further toward the next key support level of 1.0230.
Central Bank Notes:
- Main Refinancing Rate is currently at 2.00%
- Reference to rate hikes continuing at the next “several” meetings removed
- Next meeting on 15 December 2022
Next 24 Hours Bias
Medium Bearish
The Swiss Franc (CHF)
Key news events today
No major news events.
What can we expect from CHF today?
The USDCHF climbed steadily to the upside, from the 0.9462 price level, higher toward the near term high and price area of 0.9550. As the price consolidates below the 0.9550 price level, look for further DXY strength to bring the USDCHF higher. If the price breaks above the 0.9550 interim resistance level, the USDCHF could climb toward the next key resistance level of 0.96 and 0.9740.
Central Bank Notes:
- Current policy rate is at 0.50%
- Next meeting on 15 December 2022
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 trade below the 1.20 resistance level, with price action signaling further downside potential. With the GBPUSD currently trading at 1.1955, look for the GBPUSD to close strongly below 1.1950 to confirm a breakout to the downside, with the next key support level at 1.1860. As there is no major news events on the horizon, in order for the GBPUSD to trade lower, look for the DXY to strengthen further.
Central Bank Notes:
- Interest rate is currently at 3.00%
- Peak inflation revised to more than 15% in 2023.
- Next meeting on 15 December 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 Canadian GDP m/m was released at 0.1%, however, as the previous GDP data was revised upward to 0.3%, this signaled that while the Canadian economy was still growing, there was a slight slowdown in overall economic activity. This led to the USDCAD spiking upward from 1.3420 to 1.3633. The upward move was unsustained as the price retraced to consolidate at the 1.3570 price level. Look for further DXY strength to push the USDCAD higher, from the current consolidation, with the next key resistance level at 1.3740.
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 7 December 2022
Next 24 Hours Bias
Weak Bearish
Oil
Key news events today
No Major News Events
What can we expect from Oil today?
Energy prices fluctuated overnight as markets stay poised with the OPEC meeting on the horizon and as markets continue to anticipate an increase in production levels from the OPEC members. Brent is currently trading at 84.77 while WTI trades at 78.71, with a brief upside potential likely. However, look for Brent & WTI to complete the retracement to the upside before a continuation of the downtrend, with the next key support level for WTI at 74.00 and Brent at 80.40.
Next 24 Hours Bias
Weak Bearish
