The greenback and the safe-haven yen jumped higher on Wednesday, as a deficiency of certainty on U.S.-China trade talks retained investors cautious.
The U.S. official data showed that housing starts increased to 1.314 million units in October (1.320 million units expected, 1.266 million units in September). Building permits rose to 1.461 million units (1.385 million units expected, 1.391 million units in September), the highest level since mid-2007.
Later today, minutes of the Federal Reserve's latest monetary policy meeting will be released. The U.S. Federal Reserve will release its most recent monetary meeting minutes. The German Federal Statistical Office will release October PPI (-0.4% on year expected).
XAU/USD - Triple Top Violates
The safe-haven-metals prices rose mainly due to traders focusing on the latest increase in the United States and China trade war as the United States President Donald Trump warned China that the U.S. might increase the tariff even higher.
The United States President Donald Trump, speaking after a committee meeting of his administration, warned to put more punitive tariffs on Chinese goods by December 15 unless phase one of a U.S.-China deal was inked.
Expectations of the partial trade deal reduced slightly recently because China repeatedly asked the U.S. to decrease existing tariffs. Whereas high-level officials from the two nations said last week that they are close to signing the deal, Trump has unexpectedly said last Friday that he has not agreed to cancel existing tariffs.
At the Sino-US front, the United States and China fresh trade war regarding the Hong Kong bill and Beijing warned the United States to do not interfere in this matter. The risk-tone also weighs down amid on-going protests in Hong Kong and Israel.
China's unwillingness to accept a huge buying of U.S. agriculture goods every year as required by the U.S. is creating more uncertainties surrounding the trade talk progress.
XAU/USD - Daily Technical Levels
Gold - XAU/USD- Daily Trade Sentiment
On the 4 hour timeframe, gold prices have violated the triple top resistance level at 1,472. Gold has also closed a Doji and a bullish engulfing candle above 1,472 area which is suggesting chances of further buying in gold until 1,485 and 1,492 levels.
Gold prices have also crossed above 50 periods EMA, which is keeping gold supported above 1,472 area. The MACD and RSI values are also supporting the bullish bias today. Gold may trade with a bullish sentiment until 1,485 level.
USD/CAD - Canadian Inflation Ready to Play
The pair USD/CAD was closed at 1.32664 after placing a high of 1.32721 and a low of 1.31900. Overall the movement of the pair remained Bullish that day. At 18:30 GMT, the Manufacturing Sales for October from Canada came in favor of Loonie as -0.2% against the expectation of - 0.5% and supported the upward trend of USD/CAD on Tuesday.
Earlier today, the official named Carolyn Wilkins from Bank of Canada gave comments on the Canadian economic state. He said that there was still room to maneuver the low policy rate while it was 1.75%.
He also suggested that Bank of Canada has a tool for navigating the challenging economic times by conducting large scale asset purchases. The comments from Carolyn Wilkins made traders exit short positions of USD/CAD and gave the pair a robust Bullish Trend.
The drop in crude oil prices on Tuesday after the raising trade conflicts between the U.S. & China caused a decline in Commodity-linked currency – Loonie and gave further strength to USD/CAD.
On the other hand, the U.S. Dollar was also supported by the increased Building permits of 1.46M from the expectations of 1.39M. It added in the Bullish trend of USD/CAD on the second day of the week.
USD/CAD- Daily Technical Levels
USD/CAD - Daily Trade Sentiment
Recalling our previous update, the USD/CAD has violated the descending triangle pattern, which was supporting the pair around the 1.3200 area. The pair has now crossed over 50 periods EMA at 1.3220, and alongside, it has also violated the bearish trend line.
Three white soldiers on the 4-hour chart are signaling strong chances of further buying until the next resistance level of 1.3340.
AUD/USD – RBA Ready to Increase Stimulus If Needed
The pair AUD/USD closed at 0.68263 after placing a high of 0.68344 and a low of 0.67849. Overall the movement of the pair remained Bullish that day.
The Reserve Bank of Australia released its November Meeting minutes, which showed that the board of bank was prepared to ease its policy further if needed also agreed that an extended period of low-interest rates would require to meet the targets of the bank.
On the other hand, the US-China trade conflict further accelerated because of Trump's trade threat to China. He said that he would impose more tariffs on Chinese goods if the phase-one deal were not signed by December 15.
On the macroeconomic data front, the long-term American purchases declined to 49.5B at 2:00 GMT, and the Building Permits raised to 1.46M at 18:30 GMT. However, the Housing Starts remained unchanged at 1.31M.
AUD/USD - Technical Levels
AUD/USD - Daily Trade Sentiment
The AUD/USD appears to take a bearish turn after trading bullish below 0.6830 resistance area. A bearish trendline resistance at 0.6839 extends hurdle to AUD/USD pair. At the same level, the Aussie has closed Doji and bearish engulfing candles, which are suggesting chances of a bearish trend.
The 50 periods EMA stays nearby 0.6830 level. We may see bearish bias under 50 EMA levels of 0.6830. Nevertheless, the bullish breakout of 0.6840 can extend the AUD/USD prices towards 0.6860.
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