Top Trade Setups in Forex - U.S. Fundamentals In Play!
|The U.S. dollar rebounded Monday, with the ICE Dollar Index gaining 0.2% on the day to 98.98. The media reported that China is ready to strike a partial deal with the U.S. on parts that both sides have agreed upon.
On Tuesday, economists expect U.S. producer prices to grow 1.8% on year in September, as in August.
European stocks showed a lack of upward momentum, with the Stoxx Europe 600 Index easing less than 0.1%. Both Germany's DAX and France's CAC added 0.3%, and the U.K.'s FTSE 100 edged up 0.1%.
The benchmark U.S. 10-year Treasury yield climbed to 1.553% from 1.515% Friday, halting a seven-session decline. According to Federal-Funds futures data by CME Group, the probability of a further reduction in interest rates in October has advanced to 75% from 40% a week ago.
USD/JPY - U.S. 0 China Trade War In Focus
On Monday, USD/JPY was closed at 107.24 after placing a high of 107.464 and a low of 106.651. The overall trend remained Bullish that day. AT 10:00 GMT, the leading indicators of the economy of Japan came as 91.7% in comparison to the previous month’s 93.7%.
However, the impeachment inquiry against Trump will continue this week, which gives a strong bargaining position to Chinese Officials in Trade Talks.
On Sunday, there were reports about the appearance of a second whistle-blower to support the first complaint from an unnamed US Government official against US President Trump. The US democrats made an impeachment inquiry on Trump after the first whistle-blower allegations against Trump about using $400 Million as leverage for providing information after an investigation on Trump’s rival - Joe Biden from Ukraine’s President.
Traders have started to react before talks, and buying USD/JPY gave a Strong Bullish trend to this pair at the starting day of the week.
On Monday, there was a speech given by US Federal Reserve Chairman, Jerome Powell at 22:00 GMT. In response to the criticism of the Fed’s Monetary Policy from US President Trump, The Fed Chair Powell highlighted the importance of Independent Central Bank.
Powell Stressed that an Independent Central Bank could make decisions in the long-term best interests of the economy without regard to the political pressure. Which gave a boost to the expectations of no further rate cuts by the Fed in the next meeting. This news also added to the upward trend of USD/JPY on Monday.
USD/JPY - Daily Technical Levels
Support Resistance
106.62 107.17
106.33 107.43
105.78 107.98
Pivot Point 106.88
USD/JPY - Daily Trade Sentiment
Looking at the 4-hour chart, the USD/JPY pair is surged to complete 50% retracement at 107.400, which marks a 61.8% Fibonacci level. At the moment, the USDJPY has formed a bearish engulfing candle on the 4-hour chart, which is suggesting chances of bearish reversals in the market.
The MACD has crossed over 0 levels, signaling a bullish trend, but the point to note is the histogram of MCAD, which is becoming short than the previous one. The USDJPY may trade bearish below 107.300 today to target 107 and 106.700.
AUD/USD – Sideways Range Dominates
The AUD/USD was closed at 0.67299 after placing a high of 0.67650 and a low of 0.67294. AUD/USD has shown up & down movement throughout the day. The pair moved in Bearish trend on Monday.
At 2:30 GMT, The Construction Index from the Australian Industry Group came as 42.6 in comparison to the previous month’s 44.6.
US Dollar caused the bearish movement at the starting day of the week. US Dollar was the overall driver in the market that day because of the US-China trade talks ahead.
The trade talks between the US & China are due this week. China, for now, wants a stripped-down agreement, but on the other hand, America wants a comprehensive deal. The conflict in demand between both sides raised the possibility of the failure of upcoming trade talks.
Due to a few economic reports due this week, trade talks will be of the focus of attention and lead driver in the market. The minutes from the Federal Reserve will also play an essential role in setting the trend for US dollars.
The NAB Business Confidence and ANZ Job Advertisements from Australia will release at 5:30 GMT on Tuesday. Aussie traders will be looking at these publications for investment.
AUD/USD - Technical Levels
Support Resistance
0.6752 0.6782
0.6733 0.6793
0.6704 0.6823
Pivot Point 0.6763
AUD/USD - Daily Trade Sentiment
The AUD/USD pair continues to trade below 0.6770 resistance ara. The Aussie dollar is facing a hard time breaking the triple top pattern.
At the moment, For now, the resistance point of 0.6770 stays in focus as the AUD/USD has the potential to drop until 0.6700 and 0.6690 only if manages to hold below that particular resistance,
USD/CAD - 38.2% Retracement Ahead
Yesterday, USD/CAD was closed at 1.33073 after placing a high of 1.3306 and a low of 1.32900. The overall movement remained Bearish that day.
At the starting of the trade session on Monday, the rise in oil prices caused the movement of this pair in a strong bearish trend.
However, after the chances for no-deal settlement between US & China came in the market, it caused a dip in oil prices hence the Bearish trend of USD/CAD slowdown.
The trade talks between the US & China are due this week. China, for now, wants a stripped-down agreement, but on the other hand, America wants a comprehensive deal.
The conflict in demand between both sides raised the possibility of the failure of upcoming trade talks.
Due to a few economic reports due this week, trade talks will be of the focus of attention and lead driver in the market. The minutes from the federal reserve will also play an essential role in setting the trend for the US dollars.
The Canadian traders will also be looking at Tuesday’s publication of August’s Canadian Building Permits figures, which shows an expectation of ease by -2%.
USD/CAD - Technical Levels
Support Resistance
1.3291 1.3332
1.3275 1.3356
1.3234 1.3397
Pivot Point 1.3315
USD/CAD - Daily Trade Sentiment
The commodity currency Loonie has completed 38.2% retracement at 1.3290 area and has also formed a Doji pattern right above this level. With this, the USD/CAD is gaining solid support at 1.3290 level.
Below this, the USD/CAD has the potential to drop further until 50% and 61.8% retracement levels of 1.3270 and 1.3255. The pair may trade bullish above 1.3290 level today to target 1.3300.
Best wishes for the U.S. session!
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