U.S. brief, April 01 – Top trade setups in forex – Advance Non-Farm Payroll in focus!

The U.S. stocks erased early gains to close lower as fears grew about the coronavirus pandemic sending the American economy into a recession. Investment bank Goldman Sachs said it now expects the U.S. economy to contract at an annualized rate of 34% on quarter in the second quarter. It also projects a surge in the jobless rate to 15% by the middle of the year.

Meanwhile, President Donald Trump is calling for a 2-trillion-dollar infrastructure package as part of efforts to shore up the economy.

The Dow Jones Industrial Average dropped 410 points (-1.8%) to 21,917, the S&P 500 fell 42 points (-1.6%) to 2,584, and the Nasdaq 100 was down 75 points (-1.0%) to 7,813.

XAU/USD – Sideways trading continues

A day before, the yellow metal gold plunged 47 dollars or 2.9% to $1,574 an ounce before trading at 1,585. Most of the selling in gold is triggered due to increased safe-haven appeal in the U.S. dollar. The US Federal Reserve has proved a temporary repo facility for foreign central banks and other international monetary authorities, which is expected to support smooth the functioning of financial markets, causing a drop in the safe-haven gold prices.

While the coronavirus outbreak is not showing any sign of slowing down with the number of cases in the US continues to rise and reached above 177,000 so far. The coronavirus cases continue to increase in Europe, with Spain and Italy reporting a total of 200,000 cases so far. Increases level of uncertainty is keeping the yellow metal supported as well.

Regarding U.S. economic data, the Market News International's Chicago Business Barometer fell to 47.8 in March (40.0 expected), and the Conference Board's Consumer Confidence Index declined to 120.0 (110.0 expected). Later today, investors will closely watch the Automatic Data Processing (ADP) jobs report for March, which is expected to show a reduction of 150,000 private jobs.

The Markit's U.S. Manufacturing Purchasing Managers' Index (final reading, 48.0 expected), the Institute for Supply Management's (ISM) Manufacturing Purchasing Managers' Index (45.0 expected) will be reported.

XAU/USD - Daily Technical Levels 

Support  1560.95  1544.43  1498.57 

Resistance  1606.8  1636.13  1681.99

Pivot Point    1590.28

XAU/USD – Daily trade sentiment

The technical outlook of gold has become bearish as it's prices dropped from 1,630 level to 1,570. At the moment, gold is likely to encounter the next resistance at 1,590 and 1,595. Below these marks, gold has strong odds of staying under pressure and in a selling mode.

On the lower side, gold may exhibit selling until 1,571 and 1,564. While an upward breakout of 1,595 can point gold prices towards the next resistance level of 1,613. The RSI and Stochastic are still holding below 50, suggesting odds of bearish bias in gold. Let's look for selling trades below 1,590 today. 

USD/CAD - Eyes on US ISM Manufacturing PMI

The USD/CAD hit the fresh daily highs in the last hour and reached above the 1.4200 round-figure level, mainly due to broad-based USD strength, whereas the depressive oil prices did not have a significant influence on the Canadian dollar. The USD/CAD pair is trading at 1.4213 and trading in the range between the 1.4061 - 1.4293.

Following the previous session's sharp pullback of nearly 350 pips, the commodity currency pair took some fresh bids on Wednesday as the pair is being supported by a strong pickup in the U.S. dollar demand. The U.S. dollar continues to gain support as a safe-haven demand, which eventually keeps the USD/CAD pair higher. The U.S. dollar index bounced-off the 99.00 support area to trade at 99.25, daily highs.

Investors remained cautious due to the continuous concerns regarding the coronavirus pandemic. As per the latest report, the coronavirus outbreak continues to rise, with the number of cases in the U.S. still increasing and reached over 177,000. Continued lockdown in the U.S. economy has reduced the demand for crude oil and has also caused a dip in the revenue of the Canadian economy. Thus, the demand for CAD is also falling, as investors wouldn't like to invest in a nation whose revenue is declining due to a reduction in crude oil sales to the U.S.

USD/CAD – Daily technical levels

Support 1.3939  1.3807  1.3469  

Resistance 1.4276  1.4481  1.4819 

Pivot Point 1.4144

USD/CAD - Daily trade sentiment

The USD/CAD is trading with strong bullish bias, having climbed to a high level of 1.4245 while the immediate resistance stays at 1.4295. This resistance level is mostly extended double top pattern, and it has the potential to keep the USD/CAD pair in a bearish mode. While, the support stays at 1.4175, which is extended by the 50 periods EMA.  

As you can see in the chart above, the USD/CAD is also facing resistance at 1.4295, which is extended by the downward trendline. In case, the pair breaks upward; we may see USD/CAD prices heading towards 1.4530. So let's consider taking buying trades over 1.4210 today and selling trades below 1.4295. 

AUD/USD – Pair extended its bearish bias & dropped below 0.6100

The AUD/USD extended its bearish trend and dropped to fresh 2-day lows below 0.6100 level while having faced rejection at 0.6160 marks. It's mainly due to the risk-off market sentiment due to intensifying coronavirus concerns. The broad-based U.S. dollar strength as a safe-haven demand also keeps the pair lower. Right now, the AUD/USD is trading at 0.6073 and consolidates in a range between the 0.6063 - 0.6159.

Traders draw further offers in early European trading hours due to fresh risk-off market sentiment in the wake of ongoing concerns regarding the coronavirus pandemic, which continues to spread its impact on global stock markets. The U.S. equity futures continued its losses with the Treasury yields, whereas the European stock futures are down over 3%.

The global traders did not give attention to the positive Chinese Manufacturing Sector data mainly because the fears of coronavirus were on the driver's seat. China's Caixin Manufacturing PMI arrived at 50.1 in March vs. 46 expected and 40.3 last. Let me remind you, the positive economic figures from China also support the Aussie, as China is one of the biggest trading partners which China.

The U.S. dollar demand and coronavirus-led risk moves will be key to watch because these both factors will continue to influence the Aussie's price moves. Markets will also keep their eyes on the U.S. ADP Employment Change and U.S. ISM Manufacturing PMI data for fresh trading impetus.

AUD/USD – Technical levels 

Support    0.6088 0.6019 0.5887

Resistance 0.622  0.6283  0.6415

Pivot Point    0.6151

AUD/USD – Daily trade sentiment

The AUD/USD prices fell from 0.6150 level, and it seems like pair may find support around 0.6025 level. Closing of candles above 0.6025 can help drive some buying in the AUD/USD pair. But in case, the market breaks below this level, we may see AUD/USD will be exposed to 0.5875 levels. 

The RSI and Stochastics are saying below 20, which are suggesting selling trends in the AUD/USD pair. I would rather be happy to open a sell trade below 0.6020 and buying trade over 0.6030 today. 

All the best for the U.S. Session! 

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