Top Trade Setups in Forex - US FOMC In Highlights!

On Wednesday, the greenback struggled to find demand ahead of the FOMC's monetary policy announcements, and the United States Dollar Index dropped below the 97.50 marks to support the pair limit its losses for the time being. 

Reviewing the FOMC meeting, "the last FOMC minutes made it clear that most participants judged that the current stance of monetary policy is now well-calibrated and that another rate cut would require the outlook to change materially. Watch out the essential trade setups to trade today.

XAU/USD - Choppy Session Continues, FOMC In Eyes

The gold prices rose to a daily high of $1,468.68 but erased a significant portion of its gains due to recovering risk sentiment regarding trade deal between the United States and China.

Earlier in the day, the shortage of positive developments surrounding the US-China trade dispute caused investors to continue careful and boosted the demand for traditional safe havens such as gold. However, after the Wall Street Journal reported that the United States was planning to delay the December 15 tariff hike on Chinese imports, risk on returned to markets and weighed on the gold prices.

Moreover, White House acting chief of staff Mick Mulvaney said the trajectory toward a phase one trade deal with China was pretty good. After the upbeat mood, the ten-year United States Treasury bond yield made a sharp U-turn and was last up 1.2% on the day at 1.845%. Besides, after starting the day in the red, Wall Street's main indexes moved into the positive territory.

On the other hand, the greenback struggled to find demand ahead of the FOMC's monetary policy announcements on Wednesday, and the United States Dollar Index dropped below the 97.50 marks to support the pair limit its losses for the time being. 

Reviewing the FOMC meeting, "the last FOMC minutes made it clear that most participants judged that the current stance of monetary policy is now well-calibrated and that another rate cut would require the outlook to change materially.

XAU/USD - Daily Technical Levels

Gold - XAU/USD- Daily Trade Sentiment

Gold is trading nearby 1,460 levels, having created a candlestick pattern known as the hammer, which is underpinning gold on the 4-hour chart today. Gold is facing strong support around 1,458, along with resistance at 1,466. Where the violation of 1,458 support can extend gold bearish bias until 1,453 mark. On the higher side, the breach of 1,466 can lead to gold prices towards 1,473 levels today. 

We can expect such movement during the U.S. session, especially on the release of FOMC and CPI figures from the U.S. economy.

USD/CAD - 32.8% Fibo Retracement Underpins 

The USD/CAD pair closed at 1.32293 after placing a high of 1.32492 and a low of 1.32241. Overall the trend for USD/CAD remained bearish that day. The pair lost its traction and closed near 1.323 level on Tuesday. Following the crude oil prices, the Canadian dollar remained in demand on Tuesday.

Crude oil prices traded higher yesterday amid the increased hopes of U.S. delaying the December 15 tariff hike on Chinese goods. This eased the concerns over the global economic slowdown, which has hurt even the Canadian economy now.

Moreover, the Energy Information Administration (EIA), in its monthly report, said that its prediction for 2020 global oil demand grew from 50K barrels per day to 1.42M barrels per day. This report increased the demand for crude oil prices by 0.6% to $59.2 and hence raised the commodity-linked Loonie against its rival U.S. dollar in the market.

USD/CAD dropped on the back of raised demand for the Canadian dollar against the U.S. dollar. Greenback also remained under pressure due to the upcoming Federal Reserve meeting in which it will publish its monetary policy decisions and the renewed economic forecasts.

Although investors are not expecting any rate cut this time, Chairman Jerome Powell's comments will be on the focus of traders to look for fresh motivation.

USD/CAD- Daily Technical Levels

USD/CAD- Daily Trade Sentiment

The technical side of the USD/CAD has mostly remained unchanged due to a lack of fundamentals from the Canadian economy. The USD/CAD exhibited some correction as it sinks beneath the 1.3270 resistance level achieve 38.2% Fibonacci retracement at 1.3225. 

Extension of bearish retracement can drive the USD/CAD currency pair towards 1.3200 now. The MACD is in the neutral zone, and histograms remain very near to 0; consequently, we should maintain a close eye on this. If the pair heads to drop beneath 1.3200, the next target can be nearby 1.3160 for the USD/CAD. 

AUD/USD – 50 EMA Support, Brace for Breakout Setup

The AUD/USD pair closed at 0.68083 after placing a high of 0.68373 and a low of 0.68000. Overall the trend for AUD/USD pair remained bearish that day.

At 5:30 GMT, the Housing Price Index for the third quarter from Australia was published and showed a growth of 2.4% from the expectations of 0.5% and supported Aussie.

The National Australia Bank's Business Confidence Index remained flat at 4 in November but beat the market expectations of 2.

Despite stronger than expected HPI & Business Confidence Index from Australia, the pair remained on the back foot on Tuesday as uncertainty surrounding the trade deal prevails in the market.

Earlier Tuesday reports suggested that the U.S. was considering holding the latest tariff hikes on Chinese goods. But later the comments from Whitehouse Adviser Larry Kudlow that December 15 tariffs were still on board, Aussie traders got confused, and the pair started to fell to create a bearish trend.

U.S. Treasury yields gained two basis points to 1.84%, but global stocks failed to respond. Increased uncertainty has threatened the traders to enter the market.

On the other hand, the inflation reports & new loans report from China were also ignored by Aussie traders on Tuesday because of the AUD/USD pair's dependency on trade talks developments. Meanwhile, RBA Governor Philip Lowe said that the price of sending money out of the country has been consistently higher than the average for the rest of G-20 nations.

He wanted to see the country's banking industry roll out new payment platforms at a faster rate. He said that the cost of sending money across the international border was very high and needed to be reduced.

He added that digital money transfer operators were cheaper than the major banks. He further mentioned that the average mark-up over the wholesale exchange rate of banks was around 5.5% in comparison to 1% of digital money transfer operators. Lowe exclaimed that the long-term decline in the use of cheques would lead to the winding up of the cheque system entirely.

AUD/USD - Technical Levels

AUD/USD - Daily Trade Sentiment

The AUD/USD is trading with selling bias since it has already violated and crossed below the 38.2% Fibo mark of 0.6820. The AUD/USD has also achieved a 50% Fibonacci retracement at 0.6795. The AUD/USD pair is presently consolidating near0.6808, within the range of 0.6820 - 0.6795. 

A bearish violation of 0.6795 marks can spread selling unto 0.6775. The MACD is operating under 0, implying the possibilities of a bearish trend continuation in the AUD/USD. Let's watch for buying above 0.6775 and selling below 0.6820. 

All the best for the New York session!

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