The U.S. stocks remained under pressure despite an aggressive credit boost by the Federal Reserve. The Dow Jones Industrial Average slid a further 582 points (-3.0%) to 18591, and the S&P 500 declined 67 points (-2.9%) to 2237, while the Nasdaq 100 edged up 12 points (+0.2%) to 7006. Shares in Banks (-7.17%), Consumer Durables & Apparel (-6.74%) and Commercial & Professional Services (-6.67%) sectors lost the most. Macy's (-20.1%), VF Corp (-12.9%), Constellation Brands (-11.8%), Chevron (-8.7%), McDonald's (-7.7%) and Visa (-7.6%) were among the biggest losers.
Later today, eyes will be on the U.S. Commerce Department will report February new home sales (750,000 units expected). The Richmond Federal Reserve will release its Manufacturing Index for March (-10 expected).
XAU/USD - 61.8% Fibonacci Retracement
Gold prices are showing some serious gains as it's price soared from 1,552 level to place a high of around 1,614 following a near 4% jump in the previous session after the U.S. Federal Reserve declared unprecedented steps to accommodate economy spinning from the coronavirus pandemic.
As per Goldman Sachs, the latest story from the Fed for 'open-ended' quantitative easing offsets the adverse influence on emerging markets' wealth. While on Monday, the U.S. Fed rolled out an exceptional array of plans to backstop an economy spinning from extensive restrictions on business that experts say is expected to decrease the coronavirus pandemic.
The Federal Reserve announced plans to backstop a wide range of credit for households, small businesses, and major employers, citing severe disruptions to the economy caused by the coronavirus pandemic. It stated that it could purchase an unlimited amount of Treasury securities and agency mortgage-backed securities to ensure smooth market functioning. Consequently, the precious metal gold is gaining bullish correction on Tuesday.
XAU/USD - Daily Technical Levels
|
Support |
Pivot Point |
Resistance |
|
1511.24 |
1539.67 |
1594.24 |
|
1456.67 |
1622.67 |
|
|
1373.67 |
1705.67 |
XAU/USD - Daily Trade Sentiment
On Tuesday, the yellow metal gold has completed the 61.8% Fibonacci retracement at 1,608 level. Despite showing such a dramatic bullish bias, the RSI and Stochastics, which are the leading indicators, haven't gone overbought. These have just come out of the oversold zone, and these are signaling more chances of a bullish trend continuation.
With that being said, a bullish breakout of 1,608 level can extend buying until 78.6% Fibo level of 1,647. On the daily chart, gold is forming three white soldiers pattern, which signifies the chances of a bullish trend continuation. It that's the case, we should look for buying trades above 1,580 today.
USD/CAD - Saudia to Increase Production
The USD/CAD currency pair failed to extend its previous day's recovery rally and dropped below the 1.4400 round-figure marks mainly due to broad-based USD weakness. The recovery in the oil prices weakened the Canadian Dollar but failed to send the pair upside after substantial declines in the greenback. As the press time, the USD/CAD is trading at 1.4406 and consolidates in the range between the 1.4380 - 1.4534.
At the USD front, the U.S. dollar traded in the red territory and showed its strong selling bias in the wake of the U.S. Federal Reserve's latest move on Monday to ease liquidity. As per the latest report, the US central bank announced to buy unlimited amounts of Treasury bonds and mortgage-backed securities also weighed on the U.S. Dollar.
It should be noted that after the US Senators' failure to receive the much-awaited coronavirus (COVID-19) package bill, US President, Vice President, and Treasury Secretary tried to confirm traders that the stimulus package will be agreed soon, but they did not succeed to hide fears of further delays in the relief package.
The currency pair lost a significant part of the overnight gains. They got further pressured by some follow-through uptick in crude oil prices, increasing around 5% for the day, which weakens the demand for the commodity-linked currency the Candian Dollar.
However, increasing fears regarding the economic recession from the coronavirus pandemic may continue to benefit the greenback's status as the global reserve currency, which will likely turn out to be the only factor that could help the pair to drag out from the deeper losses.
Therefore, it will be good to wait for some follow-through selling, possibly below mid-1.4300s, before traders start placing for an extension of the recent pullback from multi-year tops – levels beyond mid-1.4600s – set last week.
USD/CAD - Daily Technical Levels
|
Support |
Pivot Point |
Resistance |
|
1.4358 |
1.4459 |
1.4581 |
|
1.4235 |
1.4682 |
|
|
1.4012 |
1.4906 |
USD/CAD - Daily Trade Sentiment
On Tuesday, the USD/CAD is trading slightly bullish bias, edging higher at 1.4530, mostly maintaining the bullish channel on the 4-hour timeframe. Most of the technical indicators are supporting bullish bias in the USD/CAD pair as the pair has higher chances of going further higher until 1.4700 level.
The commodity currency pair USD/CAD may gain support around 1.4330 level. The 50 periods EMA is likely to extend support at 1.4200 and mostly suggesting bullish bias among traders. Today, we should look for bullish trades above 1.4459 to target.
AUD/USD – Lowers Low Pattern In-Play
The AUD/USD currency pair flashing green and rose mid-above of 0.5900 after sharp declines in the U.S. dollar mainly because the Feral Reserve announced unusual measures to buy unlimited amounts of Treasury bonds and mortgage-backed securities. The AUD/USD is currently trading at 0.5955 and consolidates in the range between the 0.5814 - 0.5976.
The AUD/USD continued its previous day's intraday positive move from the 0.5700 marks and gained some fresh traction on Tuesday, mainly due to some aggressive US dollar selling bias.
The Fed's latest announcement came just after the US Senators' failure to receive the much-awaited coronavirus (COVID-19) package bill. This eventually weighed heavily on the greenback and turned out to be one of the key factors behind the pair's bullish move for the 3rd-consecutive session.
Whereas the latest recovery in the expectation of inflations increased investors' confidence and traders also got confidence from the strong bounce in the global equity markets. A recent improvement in the global risk sentiment provided an additional boost to the perceived riskier currencies, like the Australian Dollar, and continued support to the pair.
Looking forward, the traders will keep their eyes on coronavirus related package headlines. Besides this, traders will closely watch the coming data on today's economic calendar.
AUD/USD - Technical Levels
|
Support |
Pivot Point |
Resistance |
|
0.577 |
0.5828 |
0.5933 |
|
0.5665 |
0.5991 |
|
|
0.5502 |
0.6154 |
AUD/USD - Daily Trade Sentiment
The AUD/USD prices are trading below a double top resistance level of 0.5970. At the same level, the 50 periods EMA is also likely to extend resistance around 0.5970. While the RSI and Stochastics are staying in an overbought zone, which is why chances of a bearish bias remain strong below 0.5970.
In any case, a bullish breakout of 0.5970 resistance can extend the buying trend until a 50% Fibonacci retracement level of 0.6090 and 61.8% Fibo resistance at 0.6235. On the lower side, support holds around 0.5785. Let's consider staying bullish above 0.5828 today.
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