Top trade setups in forex – Buckle up for core durable goods orders!

The U.S. stocks pared early gains of over 1% to close mixed. The sentiment was dampened by reports that Gilead Sciences' (GILD -4.3%) experimental drug Remdesivir might not be an effective treatment for coronavirus. The Dow Jones Industrial Average ended 39 points higher (+0.2%) at 23515, the S&P 500 edged down one point to 2797, while the Nasdaq 100 eased 23 points (-0.3%) to 8641.

XAU/USD - Three White Soldiers In-Play

On Friday, the precious metal gold inched lower on a strong dollar. However, bullion was on track for a robust weekly surge lad by fears across a global recession due to the coronavirus even as central banks proceeded to release another wave of stimulus measures. The XAU/USD pair got a bullish intraday support in the wake of increased safe-haven appeal in the market. Although the recent optimism about an additional $484 billion U.S. economic package failed to extend, mainly due to the failure of Gilead's coronavirus drug in the first attempt keeps the market risk sentiment heavy.

The weaker sentiment surrounding the global equity markets helps to bring safe-haven demand, which eventually keeps the currency pair gains limited. The U.S. dollar took bids due to risk-off in the wake of on-going economic uncertainty from the coronavirus pandemic that continued supporting the U.S. dollar's status as the global reserve currency and helped the currency pair to hold its gains.

At the moment, the U.S. Dollar Index, which dropped below the 100 mark earlier in the day, is up 0.12% on the day at 100.47 and stays on track to close the 4th-straight day in the positive area. So, it will be reasonable to wait for a possible breakthrough in the current trading range of gold.

Looking forward, market traders now keep their eyes on the release of the U.S. Durable Goods Orders, which might affect the USD price dynamics and provide some meaningful trading opportunities later during the early North-American session.

XAU/USD - Daily Technical Levels

XAU/USD - Daily Trade Sentiment

Gold is likely to face resistance around the triple top 1,737 level, and closing of candles beneath this level is proposing chances of bearish retracement in gold. At the moment, gold is gaining support at 1,720. In the case of gold cracks lower, the next support is expected to be located at 1,708; however, the bullish bias remains solid. The leading indicators, such as RSI and Stochastic, are suggesting a bullish bias for gold. Thus, the breakout of 1,737 levels can trigger more buying in the yellow metal, and it may lead it towards 1,750.

USD/CAD - 50 EMA Bearish Crossover

Today in the European trading hours, the USD/CAD pair continues with it's losing streak and fell below 1.4100 round-figure marks mainly due to the improved crude oil prices. The uptick in the oil prices supported the Candian dollar, and it proved to be one of the key determinants that kept a lid on any gains in the pair.

The USD/CAD is trading at 1.4075 and consolidates in the range between the 1.4051 - 1.4116. The currency pair took some fresh bids on the last trading day of the week and built on the overnight bounce from the key 1.40 psychological mark or weekly lows.

At the USD front, the U.S. dollar caught some bids due to the risk-off market sentiment in the wake of on-going economic fears from the coronavirus outbreak that continued supporting the U.S. dollar's standing as the global reserve currency. The report that the Gilead Sciences' antiviral drug had failed to help seriously ill COVID-19 patients in his first clinical test also weighed on the market sentiment, which eventually boosted the U.S. dollar.

On the flip side, the commodity-linked currency the Candian dollar got support from some recent upticks in crude oil prices, which added to the overnight gains that mainly due to report that the producers such as Kuwait said they would move to cut output.

Despite that, the upticks in the oil prices would be short-lived as the fears about demand destruction caused by the coronavirus-lockdowns across the world might keep a lid on any further gains in oil prices.

Looking forward, market traders will keep their eyes on the release of the U.S. Durable Goods Orders, which could influence the USD price dynamics and offer some critical trading directions later during the early North American session.

USD/CAD - Daily Technical Levels

USD/CAD - Daily Trade Sentiment

The USD/CAD traded in a bearish mode, falling from 1.4106 level to 1.4050 level. On the 4 hour chart, the USD/CAD pair has crossed below 50-period EMA, which is a bearish signal for the USD/CAD pair. On the lower side, the USD/CAD pair may find support at 1.4007 level, and closing of candles over this level can help us in achieving a bullish trend unto the following screen level of 1.4150 level.

A bearish breakout of the 1.4007 support level can lead to USD/CAD prices lower towards 1.4050 and 1.3995 support levels. Consider taking selling trades below 1.409 and buying trades above the same level today.

AUD/USD – 50 EMA & Doji Candle Supports Aussie

During the Friday's European session, the AUD/USD pair failed to cheer China's MLF rate cut and dropped from the weekly high to 0.6406 level mainly due to the equity market which are reporting losses. The broad-based U.S. dollar latest gains also keep the currency pair down.

The AUD/USD is trading at 0.6358 and consolidates in the range between the 0.6338 - 0.6381. The People's Bank of China (PBOC) injected 56.1 billion Yuan into the market through targeted medium-term lending facility (MLF) operation. Notably, the central bank delver the rate cut on the 1-year targeted MLF to 2.95% from the previous rate of 3.15%, which failed to provide any significant support to the currency pair so far.

The reason behind the failure of the AUD/USD's bullish move by MLF rate cut is the amount of liquidity injected by the latest MFL operation, as it's significantly less than the 267 billion yuan while the reason behind the risk-off market sentiment could also be the failure of Gilead's coronavirus drug in the first attempt, which keeps the market risk sentiment heavy.

On the other hand, the expectations about economic recovery continue to decrease while major counties are struggling to re-start their economies. As per the latest report by Reuters poll shows the global economy is expected to face the sharpest plunge on record in 2020 due to the coronavirus pandemic-led lockdowns and delay in business activity. Hence, the choppy session can be seen in the AUD/USD pair.

AUD/USD - Technical Levels

AUD/USD - Daily Trade Sentiment

The AUD/USD continues to trade with a bullish bias of around 0.6370. As we know, the pair violated the descending triangle level around 0.6345, and now the same level is pushing the Aussie dollar prices higher. The AUD/USD may find the next resistance around the double top 0.6389 level, and violation of this mark can lead Aussie towards the next resistance level of 0.6445. The RSI and 50 EMA are in support of the bullish bias. Therefore, the upward breakout of 0.6389 level can lead the AUD/USD prices further higher towards 0.6450. On the downside, the Aussie dollar may find support around 0.6310 and 0.6265.

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