US Brief: top Trade Setups in Forex - Choppy Sessions on the Role!

The U.S. stock indexes retreated from record highs after the weaker-than-expected December jobs report. The Dow Jones Industrial Average lost 133 slipped (-0.5%) to 28823, the S&P 500 fell 9 points (-0.3%) to 3265, and the Nasdaq Composite was down 24 points (-0.3%) to 9178.

The Labor Department reported that the number of non-farm payrolls increased 145,000 in December, lower than +160,000 expected, and +256,000 in November. The jobless rate remained at 3.5% as expected.

Later today, the U.S. government is expected to report a monthly budget deficit of 15 billion dollars for December.

 

USD/JPY - Triple Top Breakout 

The USD/JPY closed at 109.500 after placing a high of 109.688 and a low of 109.432. Overall the movement of USD/JPY remained bearish throughout the day.

On Friday, before the release of Non-Farm payrolls from the United States, the pair USD/JPY remained on the upside but started to drop after its disappointing release. 

At 4:30 GMT, the Yearly Household Spending in November from Japan came in line with the expectations of -2.0%. AT 10:00 GMT, the Leading Indicators from Japan's Cabinet Office for November also came as expected 90.9%.

On the other hand, from the American side, the Average Hourly Earnings for December from the U.S. Bureau of Labor was decreased to 0.1% from expected 0.3% and weighed on the U.S. dollar. At 18:30 GMT, the closely watched Non-Farm Employment Change, which measures the total number of employed people during the month for December, also dropped to 145K from expected 162K.

However, the Unemployment Rate for December from the U.S. Bureau of Labor Statistics came in line with the expectations of 3.5%.

 

USDJPY - Daily Technical Levels

Support	Pivot Point	Resistance
109.38	109.54	109.64
109.28		109.8
109.02		110.06

 

USD/JPY - Daily Trade Sentiment

The USD/JPY pair has violated the triple top resistance level of 109.650, which is supporting the metal around 109.650. The pair has the potential to go after 110.200 today as the RSI and 50 periods EMA is supporting the bullish bias. Below 110.200, we may have an opportunity to short the USD/JPY currency pair. The major support area is likely to be 109.650 and 109.150.

 

USD/CAD - Bullish Channel In Play

The USD/CAD closed at 1.30529 after placing a high of 1.30753 and a low of 1.30288. Overall the movement of USD/CAD remained bearish throughout the day.

At 18:30 GMT, the Employment Change in December from Canada showed growth of 35.2K from the expected 24.9K in comparison of November's -71.2K. The unexpected growth in the number of employed persons in December from Canada supported the Canadian dollar on Friday.

The Unemployment Rate for December from Canada also supported the Canadian dollar on Friday. The jobless rate dropped to 5.6% from an expected 5.8% in Canada at the end of 2019 and gave strength to Loonie.

Stronger than expected Job data from Canada dragged the pair USD/CAD on Friday. The fall in the prices of USD/CAD was accelerated after the release of job data from the American side.

At 18:30 GMT, the Average Hourly Earnings for December from the U.S. Bureau of Labor decreased to 0.1% from the expected 0.3% and weighed on Greenback. The Non-Farm Employment Change from the U.S. for December also dropped to 145K against the expectations of 162K and added in the pressure of the U.S. dollar.

The Unemployment rate in December from the United States remained flat with the expectations of 3.5%. However, at 20:00 GMT, the Final Wholesale Inventories from America came in favor of the U.S. dollar as -0.1% against the expected 0.0%.

The weak Greenback against strong Loonie dragged the pair USD/CAD on Friday to the level of 1.30288. Furthermore, the Crude oil prices also fell on Friday amid the U.S. sanctions on Iran. The U.S. announced sanctions on the Construction, mining, manufacturing sectors of Iran to slow down the economic growth of Iran. It also imposed sanctions on 8 Iranian officials whom the U.S. believed were involved in the Iranian airstrikes against U.S. troops in Iraq. These sanctions rose WTI Crude oil prices on Friday and supported commodity-linked Loonie to further drag down the pair USD/CAD.

 

USD/CAD - Daily Technical Levels

Support	Pivot Point	Resistance
1.3029	1.3053	1.3076
1.3006		1.3099
1.2959		1.3146

 

USD/CAD - Daily Trade Sentiment

The USDCAD pair swings around the crucial support that declines now to 1.3025, and as we discussed in our previous report, this level describes one of the subsequent trends below 1.3092 resistance. The USD/CAD pair need to violate this level to exhibit a clear pattern. 

The USD/CAD pair has formed a bullish channel that is supporting the USD/CAD around 1.3033. On the lower side, the USD/CAD pair is likely to drop until 1.2975 and 1.2950. I will consider taking the sell trade below 1.3035 and buying above the same level today.   

 

AUD/USD – Choppy Session Continues

The AUD/USD pair closed at 0.68984 after placing a high of 0.69106 and a low of 0.68504. Overall the movement of AUD/USD pair remained bullish throughout the day.

At 2:30 GMT, the Services Index from the Australian Industrial Group (AIG) for December came in as 48.7 against November's 53.7. It showed a decline in the Services Sector of Australia in December.

However, at 5:30 GMT, the Retail Sales data from the Australian Bureau of Statistics for November showed a growth of 0.9% against the expectations of 0.4% and supported Aussie on Friday.

The stronger than expected closely watched Retail Sales from Australia gave strength to the Australian dollar against Greenback and pushed AUD/USD prices above the level of 0.6900 on Friday.

After the release of US Non-Farm Payrolls at 18:30 GMT, the pair AUD/USD surged and posted gains on Friday after falling for six previous consecutive days. The decline in the number of employed people during December in the United States signaled a weak economic condition of America and weighed on Greenback.

The U.S. Dollar Index also dropped by 0.8% that day, along with the 10-year U.S. Treasury bond yield, and helped AUD/USD to post gains in the financial market. In the coming week, the T.D. Securities data will be released on Monday from the Australian side. Also, minor housing-related reports will be released from Australia; however, from China, the Trade Balance and GDP data or December would impact on Aussie next week.

Furthermore, next week the U.S. & China will sign the phase-one of trade deal in Washington, which is expected but will definitely give a strong movement on the financial market.

 

AUD/USD - Technical Levels

Support	Pivot Point	Resistance
0.6876	0.6894	0.6917
0.6853		0.6934
0.6812		0.6975

 

AUD/USD - Daily Trade Sentiment

The Aussie has closed a bearish engulfing candle right below 38.2% Fibonacci retracement level of 0.6920. Since then, the pair is working as a strong resistance for the AUD/USD pair. 

At the moment, the pair is trying to exhibit a bearish crossover on the 50 periods EMA which may drive further selling in the AUD/USD until 0.6880 level. Until the release of the latest fundamentals, we can look for an opportunity to trade below 0.6920 with a target of 0.6860 today. 

 

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