Top Trade Setups in Forex – Canadian CPI Performs Well!
|The U.S. stocks rebounded from a 12% crash in the prior session, as market sentiment was boosted by the Federal Reserve's and the government's proposed measures to shore up the economy from the coronavirus pandemic.
The Dow Jones Industrial Average bounced 1048 points (+5.2%) to 21237. The index once dipped below the key 20000 levels earlier in the session. The S&P 500 jumped 143 points (+6.0%) to 2529, and the Nasdaq 100 gained 453 points (+6.5%) to 7474.
Shares in Utilities (+13.11%), Semiconductors & Semiconductor Equipment (+10.67%) and Household & Personal Products (+9.07%) sectors led the market higher. Dow Inc (+20.9%), Travelers (+13.3%), Intel (+12.3%), Walmart (+11.7%), PepsiCo (+12.9%) and Regeneron Pharmaceuticals (+11.5%) outperformed.
On the other hand, Marriott (-12.9%), Noble Energy (-19.9%), and Boeing (-4.2%) remained under pressure.
XAU/USD - Double Bottom Support
Spot gold saw another volatile session, as it sank to a low of $1,465 an ounce before bouncing back to close at $1,527, up 0.9% on the day and halting a five-session losing streak.
The U.S. Treasury yields settled higher as the market showed signs of stabilization. The benchmark 10-year yield advanced 27.2 basis points to 0.994%, the biggest one-day gain since September 2008.
The Federal Reserve announced plans to launch a lending facility to support short-term commercial debt markets, allowing companies to have access to short-term funds. At the same time, the White House is reported to be proposing an emergency economic rescue package amounting to US$1 trillion for businesses and taxpayers amid the coronavirus crisis.
Treasury Secretary Steve Mnuchin said that the Trump administration plans to move immediately to send money to Americans. With this, the U.S. dollar gained safe-haven appeal as investors appreciate the quick plans being executed by the U.S. economy.
XAU/USD - Daily Technical Levels
|
Support |
Pivot Point |
Resistance |
|
1478.2 |
1516.08 |
1566.4 |
|
1427.88 |
1604.28 |
|
|
1339.68 |
1692.48 |
XAU/USD - Daily Trade Sentiment
The yellow metal gold improved from 1,456 level, and it's presently trading at 1,527. The XAU/USD has immediate support around 1,515 mark. On the 4 hour table, gold has created a tweezers top pattern, which typically encourages selling sentiment in the market. Today, gold may encounter resistance at 1,551 level, and beneath this, it's prices can descend to 1,500 level. Violation of 1,500 can open further room for selling until 1,494. Let's stay bearish below 1,507 today.
USD/CAD - Saudia to Increase Production
The USD/CAD rose 1.6% to 1.4243, the highest level since January 2016, as oil prices continued to decline. On the other hand, official data showed that Canada's manufacturing sales slid 0.2% on month in January (-0.6% estimated). Later today, February CPI data will be released (+2.1% on-year expected).
The Canadian economy has released the Consumer Price Index (CPI), which grew 2.2% on a year-over-year basis in February, dropping from a 2.4% surge in January. The CPI grew 2.0%, meeting the surge in December and in January.
Whereas, the seasonal CPI increased by 0.1% in February, meeting the rise in January. Prices grew in seven of eight major elements on a year-over-year basis, with transport (+4.4%) and safety (+2.3%) prices providing the most to the all-items inflation. With positive economic data, the odds of a bullish bias in the Canadian dollar also rises.
However, the drop in crude oil prices is likely to drag the Canadian dollar. Oil prices remained dragged by demand disruption caused by the coronavirus pandemic. Nymex crude oil futures shed a further 6.1% to $26.95 a barrel, and Brent slid 3.0% to 28.62 a barrel. Consequently, the USD/CAD pair may trade higher today.
USD/CAD - Daily Technical Levels
|
Support |
Pivot Point |
Resistance |
|
1.403 |
1.4154 |
1.4333 |
|
1.3851 |
1.4457 |
|
|
1.3548 |
1.476 |
USD/CAD - Daily Trade Sentiment
On the technical front, the USD/CAD currency pair continues to trade higher for a second consecutive week. The USD/CAD prices have surged from 1.3600 level to 1.4410 level. On the weekly timeframe, the USD/CAD currency pair has the potential to go further higher until 1.4680 level. The RSI and Stochastic values are hildings over 100, which means the USD/CAD has entered the overbought zone, and it can drop anytime in the wake of bearish correction. The commodity currency Loonie may find support at 1,4330 level today, and above this, we can expect the pair to head north until 1.4700 level.
AUD/USD – Descending Triangle Breakout
The AUD/USD currency pair failed to continue its early upticks and now dropped to the lower level of its daily trading range below 0.600, mainly due to renewed weakness in the equity market. At the press time, the AUD/USD currency pair is currently trading at 0.5957 and consolidates in the range between the 0.5953 - 0.6028.
The currency pair took some bids during the Asian session on Wednesday rose from 17-year lows after the RBA announced A$ 10.7 billion worth of liquidity infusion through repo auctions.
At the USD front, the U.S. dollar lost a part of the substantial overnight gains and remained supportive, although the pair failed to extend its bullish trend due to some renewed weakness in the equity markets.
Despite organized struggles by global central banks and many government stimulus measures to balance the negative economic impact from the coronavirus pandemic, the fears of an expected global slowdown continued losing the investor's confidence.
As in result, it failed to provide any meaningful release for the perceived riskier Australian dollar, which caught buyers from placing any aggressive position. At the economic front, the preliminary readings of February month Aussie Retail Sales reversed the prior -0.3% figures with a +0.4% mark. However, the final readings, to be out on April 08, will decide the game.
AUD/USD - Technical Levels
|
Support |
Pivot Point |
Resistance |
|
0.5936 |
0.6037 |
0.6115 |
|
0.5858 |
0.6216 |
|
|
0.5678 |
0.6396 |
AUD/USD - Daily Trade Sentiment
The AUD/USD is trading bearish dramatically, falling from 0.6800 level to 0.5878 just in the time span of two weeks. On the weekly timeframe, it's forming another selling candle, which is suggesting chances of a more selling until 0.5783. The safe-haven appeal in the dollar and increases the number of cases in China has driving selling in the AUD/USD.
On the weekly timeframe, the AUD/USD prices have violated the descending triangle pattern, which is still likely to lead the AUD/USD prices towards 0.5700 while the aggressive selling target remains 0.5415. The RSI and Stochastic have fallen below 20 levels, signifying odds of more selling in the AUD/USD pair. Let's keep selling below 0.5900.
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