Top trade setups in forex – Canadian GDP on the cards!
|The U.S. stocks rebounded, as investors were pleased to see the coming of rapid coronavirus testing and the development of a vaccine. The Dow Jones Industrial Average soared 690 points (+3.2%) to 22327, the S&P 500 rose 85 points (+3.4%) to 2626, and the Nasdaq 100 was up 300 points (+4.0%) to 7889.
Shares in Pharmaceuticals, Biotechnology & Life Sciences (+5.25%), Software & Services (+4.83%) and Food, Beverage & Tobacco (+4.41%) sectors were market leaders.
XAU/USD - Double Bottom Support
On Tuesday, gold prices slipped 1% as the greenback recovered, and solid Chinese economic figures heightened risk appetite. Yet, the precious metal gold was on track for a sixth continuous quarterly surge amid concerns over a global slowdown in the wake of coronavirus.
Gold is trading with a bearish bias, falling 1% at $1,605.64 per ounce on Tuesday. It has soared approximately 6% for the quarter, and around 1.4% in the month of March. The U.S. gold slipped 1.2% to $1,599.00.
The greenback surged over 0.4%, especially after placing a 1% gain overnight. Most of the bullish bias came in response to Japanese investors and companies which hastened to cover a dollar shortage ere their fiscal year ends.
Besides, the solid Chinese factory numbers also lifted world stocks on Tuesday, but traders are spending their most critical quarter since 2008 due to economic blow from the coronavirus. The new virus has affected more than 777,000 people beyond the world, and 37,561 have expired, which are now driving support for the precious metal gold prices.
XAU/USD - Daily Technical Levels
|
Support |
Pivot Point |
Resistance |
|
1646.71 |
1669.45 |
1696.48 |
|
1619.68 |
1719.22 |
|
|
1569.91 |
1768.99 |
XAU/USD - Daily Trade Sentiment
On Tuesday, the gold is trading slightly bearish around 1,605 level after mostly staying unchanged on Monday. Gold prices are following the same trading zone of 1,594 - 1,642. The yellow metal gold is expected to find immediate support at 1,600, and below this, the next support is likely to be found at 1,594.
Conversely, the bullish breach of 1,623 mark can point gold towards the next resistance level of 1,642. Chances of bearish bias remain high, considering the recent candles on the 4-hour chart.
USD/CAD - Stable Oil Prices Supports
The USD/CAD currency pair extended its daily bullish rally and hit the high of 1.4200 despite the fresh recovery in the oil prices. However, the USD/CAD recently got a boost from the recovery in the U.S. Dollar. At the press time, the USD/CAD is currently trading at 1.4196 and consolidates in the range between the 1.4152 - 1.4208.
Even after the latest optimism, continued worries about the economic recession from the coronavirus pandemic continued giving some support to the U.S. dollar's perceived safe-haven status. As in result, the currency pair getting support from it and keep the quote higher.
The figures from Italy and Spain declined and showed signs of easing. As per Monday's figures, Italy recently registered the lowest coronavirus (COVID-19) cases, 4,050, since March 17, while Spain also showed a reduction in the death toll to 812 from 838. This eventually gave support to the oil prices earlier in the wake of a risk-on tone. However, the virus-related fears are still surrounding the U.S. because cases rose to 140,904 from 122,653 during the same period.
The oil prices recently gained support due to extended recovery in the market risk-sentiment. The WTI crude oil prices are currently trading at 21.19 and consolidate in the range between the 20.23 - 21.74. Support in oil prices is also extending support to the commodity currency Loonie.
Later in the day, eyes will be on the Canadian economic docket, especially the monthly GDP figures for January. The U.S. Conference Board's Consumer Confidence Index will be key to watch for taking fresh directions.
USD/CAD - Daily Technical Levels
|
Support |
Pivot Point |
Resistance |
|
1.3389 |
1.3414 |
1.3449 |
|
1.3354 |
1.3475 |
|
|
1.3294 |
1.3535 |
USD/CAD - Daily Trade Sentiment
On Tuesday, the USD/CAD is trading at 1.4285, mostly in a bullish mode. As you can see in the chart above, the USD/CAD prices have crossover the 50 periods EMA at 1.4195. Above this, the USD/CAD is likely to find the next resistance at 1.4400.
Zooming in the 4-hour timeframe, the recent candle is bullish engulfing, which supports the buying sentiment among traders, and it can lead the USD/CAD prices higher towards the next resistance level at 1.4400.
The closing of the bullish engulfing candlestick, followed by a bullish engulfing guide, may drive buying in the USD/CAD pair. The commodity currency may find support around 1.4235, and below this, the next support may prevail at 1.4195. Let's look for buying positions over 1.4240 level today.
AUD/USD – Upward Trendline Breakout
The AUD/USD currency pair climbed to 0.6190 from the 0.6080 level after an upbeat Chinese macro data, showing a sharp recovery in manufacturing sector activity. But the fresh recovery in the U.S. dollar eventually kept a lid on any substantial follow-through gains. At the moment, the AUD/USD is trading at 0.6167 and consolidates in the range between the 0.6079 - 0.6212.
At the data front, China's official Manufacturing and Non-Manufacturing PMIs for March surprised the markets with above 50.00 figures. In doing so, the headline manufacturing gauge crossed 45 forecasts and 35.7 before flash 52.00 while the Non-Manufacturing PMI rose to 52.3 compared to 37.8 expected and 29.6 previous readouts.
On the other hand, the February month data from Australia hinted Private Sector Credit surged past 0.2% MoM forecast to 0.4%. Besides, the New Home Sales crossed -1.9% forecast and 5.7% previous with 6.2%. Before that, the weekly Consumer Confidence figures renewed the record low while declining to 65.3 from 72.2 prior.
Despite the latest optimism, persistent worries about the economic fallout from the coronavirus pandemic continued lending some support to the U.S. dollar's perceived safe-haven status. This eventually kept a lid on any substantial follow-through gains, instead prompted some selling at higher levels, driving selling trends in the AUD/USD pair.
AUD/USD - Technical Levels
|
Support |
Pivot Point |
Resistance |
|
0.6605 |
0.6631 |
0.6669 |
|
0.6568 |
0.6695 |
|
|
0.6504 |
0.6758 |
AUD/USD - Daily Trade Sentiment
Technically, the AUD/USD prices are showing a slight selling bias as it's prices dropped from 0.6200, testing an upward trendline at 0.6110. On the 4 hour timeframe, the Aussie seems to violate this trendline and has closed a half candle below the upward trendline. At the same time, the AUD/USD is forming next candle below the upward trendline, which can confirm the violation of the bullish trendline, and it may help drive selling in the AUD/USD prices until the next support level of 0.6004.
The AUD/USD can drop further until 0.5875 in case of a bearish breakout of 0.6004 support zome. On the higher side, resistance stays at 0.6200. Let's look for selling below 0.6134 today.
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