Top trade setups in forex – Risk-off sentiment driving the market!

The U.S. stocks continued a robust rebound despite a record number of initial jobless claims. The U.S. Senate finally passed unanimously the 2-trillion-dollar coronavirus relief bill, which will then be voted by the House of Representatives on Friday.

Meanwhile, the number of confirmed coronavirus cases in the U.S. surged past 82,000, overtaking China's (over 81,000 cases) and Italy's (over 80,000 cases). The Dow Jones Industrial Average bounced a further 1,351 points (+6.4%) to 22,552, 21% up from its recent closing low. The S&P 500 rose 154 points (+5.7%) to 2,630, and the Nasdaq 100 added 427 points (+5.7%) to 7,897.

XAU/USD - Double Bottom Support

Gold remained buoyed, closing at $1,629 an ounce, up from $1,614 in the prior session. On Friday, the precious metal gold prices eased after showing five consecutive days of profits. The yellow metal is still set for its biggest weekly surge since December 2008 in the wake of safe-haven appeal as the coronavirus led to a rush in U.S. jobless claims and wreaked destruction on the worldwide economy.

The U.S. Labor Department reported that the number of Americans filing for unemployment benefits skyrocketed to 3.283 million for the week ended March 21 (1.700 million expected), surpassing the previous record of 695,000 claims seen in October 1982.

Also, U.S. official data showed that the GDP grew at an annualized rate of 2.1% on quarter in the fourth quarter (as expected), and wholesale inventories (preliminary reading) fell 0.5% on month in February (-0.2% expected).

Later today, February personal income (+0.4% on month expected), personal spending (+0.2% expected), and the University of Michigan's Consumer Sentiment Index for March (90.0 expected) will be reported. Considering the increased number of coronavirus cases and a slowdown in global economies, we may see bullish bias in the precious metal gold.

XAU/USD - Daily Technical Levels

XAU/USD - Daily Trade Sentiment

On Friday, the precious metal gold prices extend to trade sideways within a narrow trading range of 1,603 - 1,640. It looks like traders are looking for a solid reason to determine further trends in the market. Gold has an immediate support 1,613, and violation of which may open further room for selling in gold until 1,613. While resistance stays at 1,624 today. Let's see if traders trigger a breakout during the U.S. session. If this happens, we may see gold prices going towards the next target level of 1,636.

USD/CAD - USD Struggles to Gain After Long-Week Bearish Trend

The USD/CAD pair gained around 80-90 pips from the one-half week lows and hit the fresh session high at 1.4082 during the previous hours, mainly after easing some bearish sentiment around the U.S. Dollar. The modest recovery in the oil prices also gave some support to the pair as improved oil prices tend to increase demand for the commodity-linked currency loonie, which ultimately sends the pair lower.

Lately, the USD/CAD prices are showing a sharp pullback from multi-year tops, which is mostly supported by signs of increased bearish pressure surrounding the U.S. dollar. On Friday, the U.S. dollar managed to find support before the weekends and extended some support to the pair. The reason behind the pair upward movement could also be the recovery in the oil prices, which tend to weaken demand for the commodity-linked currency, the loonie.

It seems like traders understood the latest optimism over a massive $2.2 trillion U.S. economic stimulus package and concerns regarding a fall in demand due to lockdowns, and it's keeping a lid on the early positive move in oil prices.

USD/CAD - Daily Technical Levels

USD/CAD - Daily Trade Sentiment

The USD/CAD is trading bullish at 1.4120 on Friday, after testing a next support level of 1.3985. On the 4-hour time frame, the pair is trading below 50 EMA, which suggests selling bias among traders, but at the same time, the commodity currency pair has also formed a bullish engulfing candle above a support level of 1.4000.

The USD/CAD pair has immediate support at 1.4000, and violation of this can open further room for selling until 1.3850 and 1.3747. Conversely, the USD/CAD can face resistance around 1.4280. On Friday, let's consider taking selling trades below 1.4120.

AUD/USD – Risk-On Market Sentmet In-Play

The AUD/USD hit the fresh 2-weeks high above the 0.6100 level on the back of broad-based weakness in the U.S. dollar. The AUD/USD pair also got some support over easing concerns regarding an imminent global recession, which got highlighted after the Fed's unlimited QE and a massive $2.2 trillion U.S. economic stimulus package.

The AUD/USD is trading at 0.6069 and consolidates in the range between 0.6036 - 0.6127. The Aussie traders did not pay significant attention to the record drop in China's industrial profits. The figures slipped to down 38.3% YoY, for January-February. The reason could be the US dollar weakness. The US dollar index drops to the fresh low in seven days to 99.22 by the press time. While, the greenback is struggling to curb its recent losses and now seems to have receded, at least for the time being, which may limit the early gain in the currency pair.

As of now, the currency pair has fallen back below the 0.6100 round-figure marks. Due to the absence of any significant market-moving economic releases, the traders will keep their eyes on the coronavirus story and the USD price dynamics.

At the virus front, the United States cases crossed China figures of more than 81,000 and reached on the top of the list. On the other hand, the UK reported the highest single-day rise in the death toll by 103 to 578 yesterday.

AUD/USD - Technical Levels

AUD/USD - Daily Trade Sentiment

On Friday, the AUD/USD is trading sideways around 0.6045, having formed an ascending triangle pattern, which is extending resistance around 0.6130. The AUD/USD may find immediate support around 0.6005, and violation of this level on the lower side can open further opportunity of selling until 0.5885.

Typically, the ascending triangle pattern breaks out on the higher side, and if this happens, we may see AUD/USD prices soaring towards the next resistance level of 0.6260. The RSI and Stochastics are holding around 58 and 71, respectively, suggesting bullish bias in the AUD/USD pair. 

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