Top trade setups in forex – Buckle up for consumer

The U.S. stocks advanced further. as traders were motivated to see that some countries began to ease stay-at-home limitation and reopen businesses in states amid slowing new coronavirus diseases. The Dow Jones Industrial Average charged 358 points higher (+1.5%) to 24133, the S&P 500 rose 41 points (+1.5%) to 2878, and the Nasdaq 100 was up 51 points (+0.6%) to 8837.

The U.S. Commerce Department will publish March's wholesale inventories (-0.5% on month expected) and the advance goods trade balance (55.0 billion dollars deficit projected). The Conference Board will publish April Consumer Confidence Index (87.9 expected). S.P./Case-Shiller will describe the 20-City Composite Home Price Index for February (+0.4% on month expected).

XAU/USD - Upward Trendline Support

The safe-haven-metal prices failed to stop its 3-Day losing streak and dropped toward $1,700 an ounce while representing 0.53% losses on the day mainly due to a report about reopening the economies and loosening of months-long COVID-19 lockdown measures. As well as, the gains in stocks also keeps the gold prices under pressure.

Currently, gold is trading at 1,709 and consolidates in the range between the 1,706.30 - 1,725.50. However, the traders are cautious about placing any strong position ahead of policy announcements from two of the world's leading central banks.

The precious metal dropped after U.S. equities hit the highest in almost 7-weeks mainly because most of the states, including Florida, showed a willingness to ease restrictions. Italy is one of the countries that hit hardest by coronavirus outbreak, also prepared to re-start the economy, although the World Health Organization has given warning about the coronavirus pandemic and said that the virus is still far from over.

Despite the latest losses in yellow-metal, the quote is still trading near the 7-months high, mainly due to the coronavirus outbreak. In the meantime, they're following the massive stimulus by Fed and central banks to support growth caused by the epidemic, while the Federal Reserve and the European Central Bank could make policy announcements on Wednesday and Thursday.

Since the gold and U.S. dollar share the opposite correlation, gold prices also weighed down by the latest pullback in the U.S. dollar.

As in result, the Market's risk-tone remains mostly inactive with the U.S. 10-year Treasury yield taking rounds to 0.65% and getting mixed performances from the Asian stocks.

Daily Support and Resistance

XAU/USD - Daily Trade Sentiment

Gold slipped to drop and test the horizontal support level of 1,695. An upward trendline is keeping gold supported, and closing of gold prices over 1,695 support is likely to trigger buying in gold. Besides, the value of RSI and Stochastics are holding below 20, which is suggestings that the odds of bullish retracement remains strong over 1,695 support level.

On the higher side, gold's immediate resistance can be found around 1,720 and 1,735, while support continues to hold around 1,695. However, the breakout of this level may extend selling until 1,680.

USD/CAD - Triple Bottom Breakout

Today in the early Europan session, the USD/CAD currency pair flashing green and rose to a fresh session high near the 1.4065 area in the last hours mainly due to the sharp declines in the crude oil prices which tend to weakens the commodity-linked currency – the Loonie and keeps the currency pair higher.

The broad-based U.S. dollar latest pullback from the daily lows collaborates with the currency pair's gains. As of writing, the USD/CAD currency pair is currently trading at 1.3952 and consolidates in the range between the 1.3944 - 1.4074.

The currency pair continued showing some resilience near the key 1.40 psychological mark and succeeded in regaining some positive traction during the Asian session on Tuesday. The uptick in the pair was supported by multiple factors, including a fresh decline in crude oil prices and a bullish pickup in U.S. dollar demand.

The WTI crude oil prices dropped again on Tuesday due to on-going worries about oversupply and a lack of storage space across the world. These concerns come after the largest U.S. exchange-traded fund said it would sell all its front-month crude contracts to avoid further losses, which eventually weakened the Canadian dollar.

It should be noted that the traders failed to cheer the latest optimism about the easing of coronavirus-related restrictions globally, mainly due to the latest declines in crude oil prices. As in result, the traders lost their confidence during the current cautious moo in the equity markets.

At the USD front, the U.S. dollar recovered its status as the global reserve currency due to fears about the economic recession from the coronavirus pandemic. The decreasing demand for perceived riskier assets provided an additional boost to the greenback and contributed to the pair's modest uptick.

USD/CAD - Daily Technical Levels

USD/CAD - Daily Trade Sentiment

The USD/CAD fell below the triple bottom support level of 1.3998 on the 4-hour timeframe, and it's expected to show a dramatic selling trend in the Loonie. Closing of the bearish engulfing candle, along with long selling candle, are supporting selling bias in the USD/CAD pair. As of now, USD/CAD is trading at 1.3950, and the pair is pretty much likely to find support at 1.3865 level. The bearish bias remains strong as a downward channel that we can see on the 4-hour timeframe may keep the USD/CAD pair bearish. Let's look for selling trades below 1.3990 today until 1.3870 targets.

AUD/USD – Upward Channel In-Play

The AUD/USD is showing some serious gains in the wake of weakness in the U.S. dollar. The pair has soared to trade at 0.6500 ahead of the U.S. session open time. The fresh declines in crude oil prices fueled fears about the economic recession from the coronavirus outbreak and provided some fresh support to the U.S. dollar as the global reserve currency status.

The gains in the U.S. yields also pushing the greenback higher and turned out to be one of the major factors that kept a lid on any additional gains n the pair, at least for now, whereas the 10-year hit 0.65%, the highest level since April 17. The better risk sentiment is pushing yields and equity prices higher. In Wall Street, the Dow Jones is up 1.15% and the Nasdaq 1.05%.

However, the latest report regarding the easing of coronavirus-related restrictions and a push the reopening of the economies collaborates with the currency pair's bullish moves. As in result, the U.S. 10-year Treasury yields hit six basis points (bps) to 0.664% with Wall Street, also cheering the risk-on by the end of Monday's session.

Looking forward, the market traders now look forward to Tuesday's U.S. economic docket, which shows the release of the Conference Board's Consumer Confidence Index, for taking short-term trading opportunities. The coronavirus-related updates could provide some meaningful directions.

AUD/USD - Technical Levels

AUD/USD - Daily Trade Sentiment

The AUD/USD is trading with a bullish bias around 0.6501, and it seems from a bullish engulfing that we may see further buying trends in the Market. The AUD/USD pair's next target can be 9.2508 level, during support of the bullish trend. The RSI and 50 EMA are in demonstrating the bullish bias in Aussie, so, we should look for capturing bullish trend above 0.64388 level as above this, the pair may head for 0.6525 and even higher to 0.5570.

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