Top Trade Setups in Forex - Traders Brace for Christmas
|During the New York session today, the U.S. Labor Department will report initial jobless claims in the week ended December 14 (225,000 expected). The Commerce Department will publish third-quarter current account balance (122 billion dollars deficit expected).
The Conference Board will post its November Leading Index (+0.1% on month expected). The National Association of Realtors will publish November's existing-home sales (5.44 million units expected). The Philadelphia Federal Reserve will report its Business Outlook Index for December (8.0 expected).
USD/JPY - Sideways Sessions Continues
The USD/JPY closed at 109.447 after placing a high of 109.524 and a low of 109.225. Overall the trend for USD/JPY remained bullish throughout the day.
At 4:30 GMT, the National Core Consumer Price Index for the year was released from Japan, which came in flat with the expectations of 0.5% and gave null-effect to Japanese Yen.
From the American side, at 18:30 GMT, the Final Gross Domestic Product for the third quarter remained flat with the expectations of 2.1%. The same was with the Final GDP Price Index for the Quarter, which remained dull wit the expectations of 1.8% and gave almost no effect on the U.S. dollar.
At 20:00 GMT, the Core PCE Price Index for November also came in as expected, 0.1%. Personal Spending in November was in line with the expectations of 0.4% but was more than the previous month's 0.3%.
However, Personal Income in November exceeded the expectations of 0.3% and came at 0.5% and supported the U.S. dollar. The Revised Consumer Sentiment from the University of Michigan showed a minor increase of 99.3 from 99.2 of expectations and helped the U.S. dollar. The Revised UoM Inflation expectations were 2.3% in comparison to the previous 2.4%.
Most economic data released from the United States on Friday was in line with the expectations. However, Personal Income & Consumer Sentiment supported the U.S. dollar when it exceeded the forecasted value. Stronger U.S. dollar gave strength to USD/JPY pair on Friday, and it started to move in the upward direction.
On the other hand, President Donald Trump tweeted on Friday that the United States & China will sign the Phase-one deal very shortly. It increased the hopes of an end to the ongoing trade war between U.S. 7 China and gave expectations for better global economic conditions.
The increased risk factor and uncertainty created when China seemed to be reluctant to accept a large number of American farm products as part of the Phase-one deal, was removed by Trump's tweet on Friday. Thus, riskier assets such as USD/JPY returned to a positive path.
USDJPY - Daily Technical Levels
| Support | Pivot Point | Resistance |
| 109.3 | 109.41 | 109.57 |
| 109.14 | 109.68 | |
| 108.87 | 109.95 |
USD/JPY - Daily Trade Sentiment
On the 4-hour timeframe, the USD/JPY continues to trade in a narrow range, mostly in the tight trading range of 109.700 - 109.200. The USD/JPY has completed the 38.2% Fibonacci retracement at 109.200. The same level is now working as support near 109.200. The 50 periods EMA is also supporting the USD/JPY pair above 109.200 level today. But the RSI and MACD are holding in the bearish zone. Consider staying bullish above 109.300 today.
USD/CAD - Downward Trendline In-Play
The USD/CAD closed at 1.31530 after placing a high of 1.31812 and a low of 1.31205. Overall the movement of USD/CAD remained strongly bullish throughout the day.
USD/CAD pair moved higher on Friday on the back of disappointing Retail Sales data from Canada and strength pf U.S. dollar. The New Housing Price Index (NHPI) for October from Canada was in line with the expectations of 0.1%. The closely watched Core Retail Sales of October from Canada showed a massive drop to -0.5% against the expectations of 0.2% and weighed on the Canadian Dollar on Friday.
The Retail Sales for October from Canada also dropped to -1.2% in comparison of expected 0.5% and further added in the pressure of the Canadian Dollar. The NHPI for November also dropped to -0.1% in contrast to October's 0.1% and added in the pressure of Loonie. Weaker than expected macroeconomic data from Canada gave pressure to the Canadian Dollar and moved the USD/CAD pair prices in reverse direction on Friday.
Furthermore, the dropping Crude Oil prices added in the pressure of commodity-linked currency Loonie and further raised USD/CAD prices. On the other hand, the Gross Domestic product from the United States remained in line with the expectations of 2.1%, which showed good growth in the Third Quarter and supported the U.S. dollar.
U.S. dollar was also gaining on Friday on the back of rising U.S. Treasury bond yields, and hence, the rise in USD/CAD got a boost to place a high of 1.31812. The Personal Income & Consumer Sentiment data also came in favor of the U.S. dollar on that day.
USD/CAD- Daily Technical Levels
| Support | Pivot Point | Resistance |
| 0.6887 | 0.6897 | 0.691 |
| 0.6875 | 0.692 | |
| 0.6852 | 0.6942 |
USD/CAD- Daily Trade Sentiment
On Monday, the USD/CAD's bearish bias appears a bit lighter as the pair has settled a series of bullish candles on the 4-hour chart, followed by the bearish candles. Yet, the candles hold below 50 periods EMA which is keeping the pair in a bearish mode.
The USD/CAD's long duration trend persists bearish biases. The pair has the subsequent resistance around 1.3170, and breach of this can help us achieve a buy trade unto 1.3165. But below 1.3170, the USD/CAD may trade bearish until 1.3125.
AUD/USD – Triple Top Resistance In Focus
The AUD/USD prices closed at 0.68999 after placing a high of 0.69065 and a low of 0.68827. Overall the trend for UAD/USD remained bullish throughout the day.
Despite the intensity of the U.S. dollar on Friday, AUD/USD pair rose above 0.6900 level and ended its day with a bullish candle for the 3rd consecutive day in a week.
The data published by the U.S. Bureau of Economic Analysis showed that the U.S. economy expanded by 2.1% in the 3rd Quarter every year. Personal Income in the United States of America was increased by 0.5% every month in November and supported the U.S. dollar.
The Consumer Sentiment from the U.S. also increased to 99.3 and gave strength to t U.S. dollar. U.S. Dollar Index on Friday rose to 97.74, the highest level in 2 weeks on Friday.
However, the pair AUD/USD failed to react on upbeat U.S. economic data and continued to rise on Friday. The employment data from Australia on Thursday gave signals that Reserve Bank of Australia would not cut its rates in the near future gave strength to Aussie. The pair seemed to follow the demand of Aussie on Thursday's data on Friday as well.
Besides, Donald Trump said that U.S. & China would sing the Phase-one deal very shortly on Friday. This raised the positive trade sentiment in the market and removed any uncertainty over the trade truce among the two biggest markets of the world.
Australia is the largest supplier of raw-material for Chinese companies, and any headline containing the progress in the relationship between U.S. & China affects Aussie more than it affects any other currency. So, AUD/USD pair surged on Friday on the back of raised positive trade sentiment in the market, which would help in decreasing global economic tensions.
AUD/USD - Technical Levels
| Support | Pivot Point | Resistance |
| 1.3125 | 1.3153 | 1.3177 |
| 1.3101 | 1.3205 | |
| 1.3049 | 1.3257 |
AUD/USD - Daily Trade Sentiment
The strength in the Aussie has driven the bullish trend in the AUD/USD, leading the AUD/USD prices towards the triple top resistance level of around 0.6930. The AUD/USD has formed a bullish engulfing pattern on the 4-hour chart, which has closed below the triple top level of 0.6930. Closing of candles below this level is increasing odds of a bearish reversal in the AUD/USD.
The RSI and MACD are holding in an overbought zone, increasing odds for a bearish reversal/ correction in the AUD/USD. We should consider staying bearish below 0.6930 to target 0.6900 and 0.6870 in the AUD/USD.
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