Top Trade Setups in Forex - Happy Thanksgiving, What to Trade?
|The financial markets are exhibiting thin trading volume as investors enjoy the U.S. Thanksgiving holiday. The volatility is likely to pick up tomorrow during the Asian session.
The U.S. dollar trades with a bullish bias amid stronger fundamentals. The Gross Domestic Product of the U.S. for the third quarter showed growth to 2.1% against the expectations of 1.9%.
Additionally, the Durable Goods orders in October also increased to 0.6% from -1.4% in September and supported Greenback.
XAU/USD - Gold Underpins Over Diminished Haven Appeal
A day before, the safe-haven-metal prices recovered slightly as the Sino-US trade war escalated once again. The U.S. President Donald Trump signed legislation in support of Hong Kong protestors.
Trump signed the Hong Kong human rights and democracy act into law. According to the bill, the state department would be required to confirm once a year that Hong Kong is sufficiently autonomous to retain its special U.S. trading consideration. He also signed another bill banning the sale of munitions like tear gas and rubber bullets to Hong Kong police.
While China has repeatedly warned the U.S. administration, not to interference in their internal affairs, therefore, President Trump's move will likely hurt the relationship with China at a time when both sides are trying to reach a "phase one" trade deal.
Chinese and Hong Kong stocks traded lower on Thursday, while the yellow metal traded slightly higher.
XAU/USD - Daily Technical Levels
1453.27 1466.21
1445.21 1471.08
1432.28 1484.02
Key Trading Level: 1458.15
Gold - XAU/USD- Daily Trade Sentiment
So far, the precious metal hasn't moved much from its previous ranges, and it continues to trade at 1,456 with a bearish bias. Taking a look at the 4-hour timeframe, you can see a descending triangle pattern, which is extending resistance at 1,462 along with the 50 periods EMA which also stays around 1,462 level.
On the lower side, gold is likely to find immediate support around 1,452 area, and the violation of this could open further selling until 1,446. Overall, the volatility is expected to remain weaker in the wake of the U.S. Thanksgiving holiday today.
USD/CAD - Fakesetup Drives Buyers
The USD/CAD pair was closed at 1.32803 after placing a high of 1.32894 and a low of 1.32600. Overall the trend for USD/CAD remained Bullish that day.
The pair USD/CAD rose on Wednesday with Commodity-linked – Loonie struggling to find demand in the market because of Crude Oil Selloff.
At 20:30 GMT, the U.S. Crude Oil Inventories were raised to 1.6M against the expectations of -0.5M this week. The increase in Crude Oil Inventories of the United States put pressure on WTI Crude Oil prices and hence decreased the demand for commodity-linked Canadian Dollar in the market.
The weak Canadian Dollar against its rival currency U.S. Dollar gave a push to USD/CAD in an upward direction on Wednesday. Adding in the Bullish trend of the USD/CAD pair was the strength of Greenback after the publish of macroeconomic data from the United States.
The Gross Domestic Product of the U.S. for the third quarter showed growth to 2.1% against the expectations of 1.9%. Additionally, the Durable Goods orders in October also increased to 0.6% from -1.4% in September and supported Greenback.
The U.S. Dollar Index surged to its highest level in two weeks at 98.44 on Wednesday amid positive data and gave strength to USD/CAD pair.
USD/CAD- Daily Technical Levels
Support Resistance
1.3265 1.3295
1.3248 1.3307
1.3218 1.3337
Pivot Point 1.3278
USD/CAD - Daily Trade Sentiment
The USD/CAD is trading with bullish bias after printing a fakeout setup on the 4-hour chart. The USD/CAD dipped sharply to place a low around 1.3233 level after violating the 50 periods EMA and double bottom support level of 1.3260.
However, the selling trend in the USD/CAD remained short-lived as the commodity currency pair reversed to close above 1.3260 support level. This demonstrates bullish sentiment and chances of a further buying remains strong. Consider staying bullish above 1.3265 today to target 1.3320.
AUD/USD – Descending Triangle Violates
The AUD/USD pair was closed at 0.67743 after placing a high of 0.67910 and a low of 0.67718. Overall the trend for AUD/USD remained Bearish that day.
At 5:30 GMT, the Construction Work Done in Australia in the third quarter fell to -0.4% against the expectations of -1.0% and supported Aussie on Wednesday. Despite better construction data from Australia, the pair AUD/USD continues to move in downward direction amid strong U.S. Dollar across the board.
The U.S. Dollar remains in high demand on Wednesday in the market amid stronger than expected macroeconomic data. Post-U.S. Data, the U.S. Dollar index rose to its two weeks high of 98.44 and gave strength to the Greenback.
The growth in the 3rd quarter GDP of the United States to 2.1% gave a boost to the U.S. Dollar against its rival currencies. Adding in the strength of the U.S. Dollar on Wednesday were the releases of less Jobless claims of 213K and increased Durable Goods orders by 0.6%.
Stronger U.S. Dollar put pressure on AUD/USD pair and moved the pair in a downward direction. The pair moved in Bearish trend with high velocity due to the added stress on Aussie after the possibility of further monetary easing by Reserve Bank of Australia was mentioned by the bank's Governor Philip Lowe on Tuesday.
The uncertainty on Trade relations between China & the U.S. has pressed the demand of China-proxy Australian Dollar. The latest news from President Trump about the phase-one trade deal of US-China that it was on final throes and would defuse 16 months trade war, failed to give impact on Aussie because of trader's hesitancy over the back & forth trade comments from U.S. & China over the year. Traders are waiting to provide a response on any actual action on the US-China trade deal rather than giving importance to talks & comments.
AUD/USD - Technical Levels
Support Resistance
0.6769 0.6786
0.6762 0.6796
0.6746 0.6813
Pivot Point 0.6779
AUD/USD - Daily Trade Sentiment
Looking at the 4-hour chart, the AUD/USD seems to trade in a descending triangle pattern, which is likely to keep in bearish below 0.6780. The lack of trading volume is holding the pair in a choppy phase, but tomorrow the trading volume may pick up. We require to keep an eye on the 4-hour chart, and if the AUD/USD gives us closing below 0.6770, we may see a continuation of a bearish trend until 0.6720 later.
So far, the leading indicators, such as RSI and MACD, are also holding in the bearish zone. Consider staying bearish below 0.6779 today.
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