Top Trade Setups in Forex - Eyes on Canadian Labor Report
|The U.S. Dollar Index slipped -0.05% to trade at 98.39 during the Asian session. The U.S.-China currency deal being swum as a token of improvement in this week's trade discussions between the world's two biggest markets. As per currency authorities, it would often recur past commitments by China.
The US Consumer Price Index dropped in the month of September. At 17:30 GMT, the CPI came as 0.0%, and Core CPI came at 0.1%, both came lesser than expectations and weighed on US Dollar.
While the U.S.President Donald Trump's comment fuelled optimism about the positive outcome from Thursday's trade talks. Traders thought that improvement in trade talks would reduce the possibility of safe-haven appeal in the market and caused an upward trend in USD/JPY.
USD/JPY - 100% Fibo Level Violated, Eyes on 108.500
The USD/JPY was opened at 107.469 and placed a high of 107.973 until now. It is currently trading at 107.920. At 4:50 GMT, the Bank lending from Japan came less than forecasted as 2.0% for September and weighed on Japanese Yen. The Core Machinery Orders for the same month occurred in negative as -2.4% against 0.0% and put further pressure on Yen. However, the Producer Price Index (PPI) for September came as expected as -1.1%.
The weaker than expected macroeconomic data from Japan weighed on Yen in the early session and moved USD/JPY in an upward trend.
However, the upward trend was slowdown because of US macroeconomic releases. The US Consumer Price Index recorded a drop in the month of September. At 17:30 GMT, the CPI came as 0.0%, and Core CPI came at 0.1%; both came lesser than expectations and weighed on US dollars.
But the positive news related to US-China Trade Talks brought back the Bullish trend in the market and caused USD/JPY to place a high of 107.973 on Thursday.
On Thursday, the United States and China began their principal-level talks in Washington. After the meeting, it was reported in South China Morning Post that there was no progress in deputy- level trade-talks and that Liu would cut his visit short. However, the US President Donald Trump announced that he and Chinese Vice Premier, Liu He, would meet on Friday.
Trump's comment fuelled optimism about the positive outcome from Thursday's trade talks. Traders thought that improvement in trade talks would reduce the possibility of safe-haven appeal in the market and caused an upward trend in USD/JPY.
USD/JPY - Daily Technical Levels
Support Resistance
106.77 107.41
106.47 107.75
105.83 108.39
Pivot Point 107.11
USD/JPY - Daily Trade Sentiment
On Friday, the safe-haven currency pair USD/JPY continues to trade bullish after violating a long-held 61.8% Fibonacci retracement level of 107.350. The USD/JPY has closed crosses over 100% Fibonacci retracement level, confirming the sentiment that bullish more buying is on the way.
The MACD stays over zero levels, signifying a strong bullish bias in the USD/JPY currency pair today. The USD/JPY can extend the buying trend over 107.700 to target 108.20 108.450.
AUD/USD – Violates Triple Top Resistance
The AUD/USD was opened at 0.67223 and placed a high of 0.67743 until now. It is currently trading at 0.67596. The Home Loans report from the Australian Bureau of Statistics at 5:30 on Thursday came 1.8% against 3.6% expectations weighed the Aussie. The MI Inflation Expectations from the Melbourne Institute came as 3.6% at 5:38 GMT. The rise of inflation expectations to a six months high boosted Aussie in the early trading session on Thursday.
From America, the US Consumer Price Index showed a drop in the month of September. At 17:30 GMT, the CPI came at 0.0%, and Core CPI came as 0.1%, both came lesser than expectations and weighed on US Dollar. After the weak Consumer Inflation from the United States later on Thursday, the rise in AUD/USD prices gained further.
As China is the most significant trading partner of Australia, the effect of US-China talks on Aussie would be of considerable extent. On Thursday, after the US-China trade talks, it was reported that as a part of the partial trade deal, the United States was considering a currency pact with China. This report gave strength to the Australian Dollar and increased the rate of the upward trend of AUD/USD to place a high of 0.67743.
AUD/USD - Technical Levels
Support Resistance
0.6715 0.675
0.6702 0.6771
0.6668 0.6805
Pivot Point 0.6736
AUD/USD - Daily Trade Sentiment
Finally, the AUD/USD has violated long-held 0.6770 resistance earlier day today. Recalling our previous forecast, the AUD/USD is now trading bullish above 0.6736 to target 0.6765. The MACD and RSI are also supporting the bullish sentiment, along with the 50 periods EMA.
On the technical side, the AUD/USD may go after 0.6800 later in the day. So, the AUD/USD traders should look for buying positions over 0.6780 today.
USD/CAD - Ascending Triangle Breakout Lower
USD/CAD was opened at 1.33315 and placed a low of 1.32686 until now. It is currently trading at 1.32969. At 17:30 GMT, the New Housing Price Index from Canada showed a growth of 0.1% against expectations of 0.0% in the month of September and supported the Canadian Dollar on Thursday.
From America, the US Consumer Price Index showed a drop in the month of September. At 17:30 GMT, the CPI came at 0.0%, and Core CPI came as 0.1%, both came lesser than expectations and weighed on US Dollar.
The robust macroeconomic data from Canada and weak macro data from the United States weighed heavily on USD/CAD prices and created a Bearish trend for Thursday.
On Thursday, the Crude oil prices rose amid the hints are given by OPEC to cut the supply of crude oil further. The news barely a month after the tight supply scare from Saudi attacks sent Crude Oil prices higher and supported commodity-linked - Loonie to weigh on USD/CAD.
The rise in oil prices on Thursday supported the bearish trend of USD/CAD prices and made a further drop in it to place a low of 1.32686.
USD/CAD - Technical Levels
Support Resistance
1.3296 1.3345
1.3268 1.3365
1.3219 1.3414
Pivot Point 1.3316
USD/CAD - Daily Trade Sentiment
Yesterday, the USD/CAD was trading within an ascending triangle pattern, which extended substantial resistance at 1.3350 along with support at 1.3300 area.
Instead of breaking upward, the USD/CAD has violated the pattern on the lower side. The 1.3300 level, which worked as a support, is now working as a resistance.
The USD/CAD is now testing 50% Fibonacci retracement at 1.3275. Considering a bearish crossover on the 50 periods EMA, 1.3270 support level may get violated to lead the USD/CAD towards 1.3260.
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