Top Trade Setups in Forex - Buckle Up US Manufacturing PM!
|On Friday, the dollar endured overnight gains, as traders stuck to the safe-haven due to ongoing developments in Sino-U.S. trade talks and amid growing uncertainty about the news of progress in the discussions.
The U.S. stocks settled under stress as traders were still frustrated by mixed messages concerning trade the US-China trade talks. The Dow Jones Industrial Average shifted 54 points (-0.2%) to 27766, the S&P 500 fell 4 points (-0.2%) to 3103, and the Nasdaq Composite was down 20 points (-0.2%) to 8506. The US government bonds halted their recent rally, as the benchmark U.S. 10-year Treasury yield rebounded to 1.771% from 1.745% Wednesday.
Later during the U.S. session, the University of Michigan will publish its final readings of the November Consumer Sentiment Index (95.7 expected).
XAU/USD - Fakeout Pattern Revealed
The safe-haven-metal prices dropped mainly due to renewed trade talks between the United States and China. The report came from the China Ministry that China will try to make a first trade deal with the United States because both sides keep communication channels open.
At the Sino-US front, the chances that the United States will likely delay the increased Tariff on Chinese goods. Meanwhile, China invited the United States negotiators, as delivered by the South orning Post and the Wall Street Journal, recently trying to retore the sentiment of the market. However, uncertainties still surrounding the United States and China trade deal because China now awaits the United States President Donald Trumps to proceed with the Hong Kong bill after congress passed the much-criticized bill.
On the other hand, the global equities and the greenback markets are still cautious and nervous regarding the future of the Sino-US trade deal. That comes after Washington passed two bills meant to support protesters in Hong Kong and send a warning to China on its human rights policies.
On the negative side, the Gold prices came under pressure mainly due to Wednesday's release of the Federal Reserve's minutes from its October meeting that clearly showed central bankers at the Fed's Federal Open Market Committee (FOMC) against a 4th-straight rate cut which is unlikely scheduled in December.
XAU/USD - Daily Technical Levels
Support Resistance
1459.72 1471.88
1454.97 1479.3
1442.81 1491.46
Pivot Point 1467.14
Gold - XAU/USD- Daily Trade Sentiment
Gold has previously examined our earlier mentioned support mark of 1,462. Presently it's trading bullish but still in a narrow trading range of 1,472 to 1,462. Considering the oversold zone scenario of gold, it's very likely to the bullish sentiment above the upward trendline support of 1,465. The MACD and RSI are still holding in the selling zone; therefore, we may find selling opportunities below 1,472 level.
USD/JPY - Symmetric Triangle Pattern Intact
The USD/JPY closed at 108.615 after placing a high of 108.696 and a low of 108.275. Overall the trend for pair remained Slight Bullish that day. At 9:30 GMT, the Industrial Activity from Japan came in as expected for October at 1.5%. However, from the American side, at 18:30 GMT, the U.S. Unemployment Claims for this week exceeded the expectations of 215K and came in as 227K and gave pressure to U.S. dollars.
At 20:00 GMT, the C.B. Leading Index came in as -0.1%, which was as expected. The Existing Home Sales also gave pressure to U.S. Dollars when it came in as 5.46M against the expectations of 5.49M. Though macroeconomic data from the United States was not in favor of U.S. Dollar USD/JPY still managed to move in Bullish trend on Thursday.
The pair rose amid the increased 10-Year U.S. Treasury bond yield, which climbed to 1.78% on Thursday. After the news released on the Chinese News Outlet named South China Morning Post (SCMP) that White House could delay the Tariff's hike on Chinese goods in December, which Trump threatened to impose in case of phase-one trade deal failure.
This news came after the Chinese Officials invitation to U.S. Trade Negotiators to start a new round of trade talks before December to complete the Phase-One trade deal. It created a positive sentiment in the market and caused safe-haven assets to lose interest. As a result, USD/JPY gain traction amid robust U.S. Dollar.
However, some investors believe that there is a long way to go for the Phase-one deal to be signed because of U.S. involvement in Chian& Hong Kong affairs. And also because of the difference of interests of both countries regarding intellectual property issues and agricultural purchases.
This view of thought held back the upward trend of USD/JPY and gave a slight Bullish trend to pair on Thursday. Adding in the bullish compressed trend was weak macroeconomic data from the United States.
USD/JPY- Daily Technical Levels
Support Resistance
108.48 108.72
108.35 108.83
108.11 109.07
Pivot Point 108.59
USD/JPY- Daily Trade Sentiment
The USD/JPY extends trading sidelong at 108.450, lingering beneath the 50 periods EMA resistance level of 108.700. On the 4 hourly timeframes, the safe-haven USD/JPY has formed a symmetric triangle pattern, which is proposing odds of bullish or a bearish violation in the USD/JPY currency pair. The pair can break each side, but the thing is, traders are eyeing the U.S. Manufacturing PMI figure to determine its movement.
The USD/JPY has next support near 108.300, and violation of this can trigger sell-off until 108.
AUD/USD – Aussie Manufacturing PMI Ahead
The AUD/USD pair closed at 0.67848 after placing a high of 0.68138 and a low of 0.67830. Overall the movement of the pair remained Bearish that day. The AUD/USD advanced to a fresh daily high of 0.6815 in the early trading session on Thursday but lost its traction and erased all the gains and started to move near 0.6800. The pair failed to be on an upward trend on renewed trade optimism due to Strong U.S. Dollar.
The U.S. Dollar remains strong on Thursday across the board due to FOMC meeting minutes revealed that the Fed would keep its monetary easing on Hold. That has raised the U.S. 10-YTreasury Bond Yield to 1.78% and put pressure on AUD/USD.
The trade optimism emerged after news published in South China Morning Post that said that America would delay its tariffs hike on Chinese goods, which were threatened by Trump in previous days. Although the positive sentiment on the US-China Trade conflict gave support to AUD/USD, the pair moved in a downward trend.
The downward trend was also helped by the U.S. involvement in Hong Kong & China affairs. China is waiting for the decision of Trump to whether to pass the bill of Hong Kong Human Rights & Democracy into law to further react to the situation. And investors think that there are still chances for the failure of the Phase-one deal of U.S. & China, which gave a boost to the Bearish trend of pair.
AUD/USD - Technical Levels
Support Resistance
0.6776 0.6807
0.6764 0.6826
0.6733 0.6857
Pivot Point 0.6795
AUD/USD - Daily Trade Sentiment
The AUD/USD proceeds to trade in a bearish trend beneath 0.6813 level, which is extended by the 50 periods EMA resistance. Besides that, the downward trendline is also pushing the AUD/USD exchange range lower on the 4-hour chart.
At the moment, the Aussie is trading at 0.6787, which is very close to a double bottom support level of 0.6770. We can anticipate Aussie to dispense a slight bullish retracement until 0.6820, and that's where we can expect further sellers taking a position in the market.
All the best for the New York session!
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