Top Trade Setups in Forex – Coronavirus Keeps Market On a Move!

The U.S. stocks posted a powerful upswing in the final minutes of trading, just after President Donald Trump declared the coronavirus pandemic a national emergency. Most losses made in the 10% sell-off Thursday have been recovered.

President Trump said: "The action I am taking will open up access to up to 50 billion dollars, a large amount of money for states and territories or localities in our shared fight against this disease."

And the U.S. House of Representatives passed an aid package to fight the outbreak that includes free testing and paid sick leave, as well as measures to help stabilize financial markets.

XAU/USD - Major Support Zone Reached

On Monday, the precious metals caught another defeat on worries that a wave of emergency stimulus actions by central banks won't be sufficient to support a rapidly worsening economic outlook.

The yellow metal gold, coming off the most significant weekly fall in nearly four decades, extended gold's prices to 1,462 at the time of writing this update. It's mostly because the market sentiment turned even after additional emergency movements by the Federal Reserve. Platinum sank the most on a historical level, and silver declined the most since 2011.

The gold market is caught between the safe-haven demand and a rush to build cash and cover losses in other markets. While retail traders from Singapore to the U.K. lately noticed a surge in demand for precious metals.

On Sunday, U.S. Federal Reserve slashed interest rates to near zero percent while announcing plans to purchase 700 billion dollars in bonds and securities to stabilize financial markets and support the economy. On Monday open, U.S. stock futures dropped nearly 5% to their daily limit.

XAU/USD - Daily Technical Levels

XAU/USD - Daily Trade Sentiment

Gold prices are taking a bloodbath, having from an intraday high of 1,575 level to an intraday low of 1,463. In the daily timeframe, the precious metal is likely to find support around 1,454 level, and violation of this level can extend a drop until 1,447. The XAU/USD is in an extremely oversold zone, and it's looking for a reason to trigger bullish retracement in gold.

The precious metal can exhibit buying above 1,457 level and can reverse its losses until 1,487 and 1,500 markets later in the day.

USD/CAD - Upward Channel In-Play

The USD/CAD gained 0.2% to 1.3829, after a 0.9% decline on Friday. The Bank of Canada lowered its target rate by 50 basis points to 0.75%, saying, "this unscheduled rate decision is a proactive measure taken in light of the negative shocks to Canada's economy arising from the COVID-19 pandemic and the recent sharp drop in oil prices". The central bank added that it "stands ready to adjust monetary policy further if required."

When the U.S. Federal Reserve cut interest rates to near-zero on Sunday, the Dollar dropped, since the movement swept away the yield on holding dollars and with it much of their appeal.

Oil prices benefited from President Trump's saying that his government is to buy large quantities of crude oil for the Strategic Petroleum Reserve to take advantage of lower oil prices. Nymex crude oil futures rose 2.8% to $31.87 a barrel, and Brent rebounded 4.3% to $34.07.

USD/CAD - Daily Technical Levels

USD/CAD - Daily Trade Sentiment

The USD/CAD is trading with a solid upward trend, having surged to a high level of 1.3980. It's a double top level, which may provide an immediate resistance around 1.3980. Continuation of a bullish trend can lead the USD/CAD pair towards the next resistance level of 1.4050 and 1.4115.

The 50 periods EMA is also in favor of a bullish bias, and it's keeping USD/CAD bullish. While the RSI has come out of an oversold zone, suggesting bullish trend continuation. For now, the USD/CAD's support prevails at 1.3965. Let's look for bullish trades above 1.3862.

AUD/USD – Lowers Low Pattern In-Play

The AUD/USD currency pair flashing red but recovered from the fresh multi-year low despite the disappointment from China's February month Retail Sales, Industrial Production. At the press time, the AUD/USD currency pair is currently trading at 0.6154 and consolidates in the range between the 0.6097 - 0.6306.

At the data front, China's February month Retail Sales dropped 20.5% compared to 1.5% market expectations and 6.9% earlier readout, whereas Industrial Production shrinks 13.5% versus 0.8% forecast and 8.0% prior.

China’s January-February Retail Sales YoY, the number arrived at -20.5% vs. +0.8% exp and +8.0% last, with Industrial Output YoY at -13.5% and +1.5% exp and +6.9% last. Meanwhile, Fixed Asset Investment YoY stood at -24.5% vs. +2.8% expected and +5.4% last.

As we know, the AUD/USD currency pair earlier reacted to the market's shock from the Fed's surprise rate cut, the second in the month, which was followed by the RBNZ's rate cut and likely followed by the BOJ's monetary policy easing.

AUD/USD - Technical Levels

AUD/USD - Daily Trade Sentiment

On the technical side, the bulls will look for entry only if the pair manages to stay strong beyond 0.6235, comprising February month low. Looking forward, the investors will now keep their eyes on Thursday's RBA moves because the Aussie central bank recently showed a willingness to purchase government bonds and take further measures.

On Monday, the AUD/USD prices fell sharply from 0.6296 level, and it seems like the AUD/USD prices are likely to drop further until 0.6045. The AUD/USD is consistently forming strong red candles that are showing no sign of bullish sentiment among traders. Let's consider taking sell trades below 0.6150 until 0.6046.

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