U.S. Brief, December 09 – Top Trade Setups in Forex – Canadian Building Permits & House Stat In Focus!
|On Monday, the market is showing corrections in response to solid moves made on NFP figures.
The United States' nonfarm payroll report continued to impact the market, driving a bullish trend in the greenback and stocks. The U.S. Labor Department data showed that employers added 266,000 jobs in November - the most since 312,000 in January.
Besides, the Employment Change for November from Canada showed a massive decline to -71.2K against the expectations of 10.0K and weighed heavily on the Canadian dollar. The Unemployment Rate from Bank of Canada also showed an increase to 5.9% against the expectations of 5.5% for November and added in the pressure of the Canadian dollar.
XAUUSD – Bullish Retracement In-Play
The safe-haven-metal prices are consolidating in the narrow range as traders awaited the United States Federal Reserve meeting, which is scheduled to happen later this week. The trader also awaits for the United States and China trade progress updates.
The gold prices dropped during Friday after an unexpectedly better United States nonfarm payroll report, which pushed the greenback and stocks bullish. The U.S. Labor Department data showed that employers added 266,000 jobs in November - the most since 312,000 in January.
At the Sino-US front, the United States tariffs on China are ready to be inflicted on December 15. Until now, the U.S. doesn't seem to respect the trade deal, even after China supported the agricultural demand and decided to layoff tariffs on U.S. products.
For now, traders await the U.S. Federal Reserve meeting that is scheduled to happen on Tuesday. Whereas the Federal Reserve is likely to keep rates steady after the robust jobs data, which was released last week.
XAUUSD – Daily Technical Levels
Support Resistance
1464.34 1486.32
1451.14 1495.1
1429.16 1517.08
Pivot Point 1473.12
Gold – XAUUSD – Daily Trade Sentiment
The U.S. NFP numbers were released better than expected and prompted intense sell-off in the market. At the moment, the precious metal gold is trading at 1,460 levels, having formed an inverted hammer pattern, which is supported by a strong bearish bias.
Usually, such patterns stimulate bullish reversals in gold. But the thing is, the closing candle of Friday seems strongly bearish, and it's exhibiting substantial bearish bias.
If gold extends to trade bullish over 1,458 support, the probability of 23/6% Fibo retracement and 38.2% retracement at 1,463 and 1,466 remains pretty stable. Alternatively, the breakout of the 1,457 level can drive sell-off until 1,453 level.
USD/CAD – Support Become Resistance Pattern
The USD/CAD pair closed at 1.32545 after placing a high of 1.32697 and a low of 1.31713. Overall the trend for the USD/CAD pair remained bullish.
The Employment Change for November from Canada showed a massive decline to -71.2K against the expectations of 10.0K and weighed heavily on the Canadian dollar. The Unemployment Rate from Bank of Canada also showed an increase to 5.9% against the expectations of 5.5% for November and added in the pressure of the Canadian dollar.
The weaker than expected job numbers and the unemployment rate from Canada depicted the slowdown of the Canadian economy for the previous month. It means that the strong economy of Canada is finally being affected by the global economic slowdown, perhaps taking an impact of the U.S. -China trade war.
The Bank of Canada held its rates on hold at 1.75% this week in its latest policy meeting, hoping that the global economy was now recovering. This damage the Canadian Dollar in the financial market on Friday very severely and made the US dollar more attractive against it.
Meanwhile, the robust Job Reports and Unemployment Rate from the United States contrasted with the results from Canada and raised the US dollar onboard against its counterpart currency CAD. Weak Loonie and strong Greenback raised the USD/CAD above 1.326 level at the ending day of the week.
Furthermore, crude oil prices rose sharply this week as the OPEC and OPEC+ agreed on deeper production cuts of crude oil and raised its prices with more than 1% at $59.13 per barrel on Friday.
USD/CAD – Daily Technical Levels
Support Resistance
1.3192 1.329
1.3133 1.3329
1.3034 1.3428
Pivot Point 1.3231
USD/CAD – Daily Trade Sentiment
The USD/CAD surged on stronger NFP figures to trade and hit support come resistance level of 1.3266. The USD/CAD may now find resistance around 1.3266, along with support around 1.3200.
Taking a look at the MACD and RSI, these are consolidating the buying zone, suggesting odds of a bullish trend. The USD/CAD may continue to trade bullish above 1.3266 and bearish below the same level. The 1.3266 resistance is also extended by a bearish trendline resistance level today.
AUD/USD – Aussie to Complete Fibonacci Retracement
The AUD/USD pair closed at 0.68405 after placing a high of 0.68571 and a low of 0.68233. The Australian Dollar made a bullish candle at the ending day of the week amid the increased hopes for interim trade deal settlement between US & China. Australia is highly sensitive to the US-China trade situation because it is the major supplier of raw-materials of Chinese companies.
On Friday, Larry Kudlow, the White House economic adviser, stated that a partial trade deal with China seems to be near. Larry announced that there was no absolute deadline for the trade agreement, but December 15 endured a significant date concerning a no-go or go on tariffs. He added that both parties were close to agreeing on interim trade deal as they were under daily constructive talks.
According to Larry, President Trump liked the situation of current trade talks but was not ready to sign any deal with China.
Meanwhile, China to inject some momentum into the ongoing talks announced to exempt some US soybeans and pork from tariffs. China imposed 25% tariffs on US soybeans and pork in July 2018 after the US slapped punitive duties on Chinese goods.
The Ministry of Commerce spokesman Gao Feng said on Thursday that if both sides agreed on the phase-one deal, then tariffs should be reduced accordingly.
The positive gesture from Chinese to remove tariffs on soybean and pork gave trade optimism a rise on Friday and increased the demand for Aussie in the financial market, which boosted AUD/USD prices above the level of 0.68500.
Support Resistance
0.6826 0.686
0.6808 0.6875
0.6774 0.6909
Pivot Point 0.6842
AUD/USD - Daily Trade Sentiment
On Monday, the AUD/USD is trading bullish above 38.2% Fibonacci retracement at 0.6820. Right now, the AUD/USD currency pair is trading just above the 50 periods EMA support level of 0.6820.
A bearish breakout of 0.6820 level can extend selling until 0.6800. The MACD value still holds below 0, signaling the chances of a bearish trend continuation in Aussie. Let's look for buying above 0.6825 and selling below the same level.
All the best for the New York session!
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